On The Supervision Of The Institutions Of Small Loan In China

The institutions of small loan are defined as organizations which provide Credit Services of amount of smaller and less stringent conditions for Low-income groups and micro-enterprises. These organizations mainly provide financial financing services for the "three rural" economy and rural financial markets. Although the institutions of small loan in China have got some developments, it can not meet the requirements of the society. One of the reasons is lacking of strong legal monitoring system. Basic theory emphasizes the financial sector of the market must be monitored, and supervision is widespread in the area of finance which are providing theoretical supports for rationality of supervising the institutions of small loan. Effective supervision of the institutions of small loan be able to ensure their sustainable development, to prevent and solve their business risks, to ensure that it always serve the "three rural" economy.Even success of International micro-credit organization and its mode is because of its own products, systems and management and other reasons, but it is undeniable that its effective regulatory system plays an important role. Panoramic viewing of the national regulatory practice, we can get some useful experience about building and perfecting the supervisory system of the institutions of small loan in China. First of all, we should clear the supervisory body of the institutions of small loan, and should choose different regulators according to the different mode of operation, organizational forms and fund resources. Secondly, we should implement different content, mode and extent of regulatory systems which should be commensurate with the financial system. Thirdly, we should take prudent regulatory and non-prudential regulation mode respectively for absorbing deposits in public or not.The institutions of small loan in practice of China show that China’s current supervision of the institutions of small loan have excessive and inadequate supervising problems due to the coexistence of the principle of prudential supervision and non-prudential regulation ,with the exception of lacking regulatory laws, clear regulatory body, the supervisory system and other issues. In order to ensure the smooth development of China’s institutions of small loan, it urgently needed improving China’s legal system of supervision of the institutions of small loan from the regulatory body, regulatory content, regulatory measures and so on, and achieve the mostly effective regulation by establishing and perfecting the supervisory assistant system.