The Research On The Impact Of The Development Of Informal Credit To China’s Economic Growth

Informal credit in our country has been developed actively in recent years. Early2011Wenzhou and other places the boss runing road surges and business closuresmakes informal credit to have once again become the people’s attention. Addition tothe informal credit long-term in the financial regulatory system, the free developmentof informal credit makes financial markets and social instability. Informal creditpositive role in China’s economic growth to be sure, but also to regulate the informalcredit, make them to orderly develop, this can help to break China’s formal financialmarket monopoly in financial markets, and promote China’s financial marketsmulti-level development. So informal credit on the impact of China’s economicgrowth has important theoretical and practical significance.Informal credit activities underground and hidden features, therefore, cannotdirectly through the official statistics get its size, based on the assumption thatestablished on the basis of the size of the informal credit measuring model, work outthe national folk loan scale and the scale of the province informal credit. Drawn fromthe results of the estimates, there is a big gap between the provinces of the scale ofinformal credit, overall, the scale of informal credit showed a decreasing trend fromthe eastern, central to the west. Based on the scale of informal credit in1999-2010,investment in fixed assets, research funding, employment panel data, theestablishment of a panel data model, the fixed effects regression model is derived byF-test and H-test.The empirical results show that the informal credit promotes China’s economicgrowth. Informal credit among provinces influences economic growth different,overall, showed an increasing trend from western, central to eastern part of China’seconomic growth efforts. The eastern role in promoting China’s economic growth isthe biggest, central followed by western smallest and is a big gap between the westernregion and the eastern and central regions.From the Wenzhou informal credit current situation, due to non-standard andnon-regulatory informal credit, high interest rates and even loan-sharking and otherphenomena caused by informal credit, coupled with informal credit haphazarddevelopment, so that the funds for general physical development of the total about35%, when the capital strand breaks, companies unable to repay their huge debts have been appearing the influx of boss runing road tide and business failures, so that thefunds provided suffer a total loss, expanding informal credit risks, affecting socialstability. So far informal credit in our country does not have full legal status ofinformal credit activity, there is no legal basis for the lack of supervision at the sametime, the development of informal credit considerable arbitrariness in China’seconomic growth is hampered to some extent.So in this paper, the informal credit existing problems put forward thecorresponding policy suggestions, and regulate to informal credit rules; to make folkloan are better able to promote China’s economic growth.