Legal Risk Control Of Private Financing

In recent years, with the rapid development of the world economy and financialsystem, the folk financing plays a more and more important role in the financial industry,by virtue of its own flexibility, low threshold for the construction and development ofChina’s private enterprises and civil project. Distinguished from bank financing, folkfinancing is mainly that the capital people belong to the folk organization and does notbelong to the national statutory financial institutions, in addition that the folk financinginterest rates are higher, but the lending threshold are relatively low. With the acceleratingglobalization of the world economy, China’s economy is accelerating, as the result thateconomic construction, the development of enterprises need capital support. HoweverChina’s current bank loans audit is very strict. Many enterprises, especially small andmedium-sized enterprises are difficult to through bank loans to meet their owndevelopment needs, and so many of the enterprises have to choose the folk financing way.Compared with the bank, folk financing has the convenient and fast advantage. But thereis a big problem in its risk management. Coupled with the imperfect system, the folkfinancing in China has to face a huge legal risk of laws and regulations. Under the presentlegality, our country is mainly repressive attitude to the folk financing, but in reality, thefolk financing is needed by society and enterprise. Because the laws and regulations of ourcountry have no objective understanding to the folk financing function and nature, whichleads to narrow legal financing channel is narrow and not clear boundaries between thelegal and illegal financing, and the fuzzy and confused regulations easily make folkfinancing enter into the legal forbidden area.According to the huge demand for financing in the rapid development of economy ofcurrent our country, to effectively improve the folk financing legal supervision, andimprove the preventive management of folk financing legal risk are the primary issues tosolve in the current private financing. In this paper, the theory of social risk which calledMarx were first analyzed, and then the related concepts of private finance in detail wasmade a analysis. Meanwhile, the status of Hebei private financing and the evaluation ofHebei province folk financing legal risks are made comprehensively analysis. Finally,after discussing the main problems in the development and current situation of folkfinancing in China caused by the legal risk, I put forward the corresponding countermeasures. I hope that this study can improve the folk financing of our country’slaws and regulations and legal risk prevention level.