Legal Control Of The Risks Of China’s Micro-credit Companies

Drawing on the successful experience of foreign micro-finance and in the background of the rural financial system reform, China’s micro-credit company is a kind of financial system innovation. Compared with the formal financial institutions, micro-credit companies which set goals in serving farmers, agriculture and rural areas face more risks in the business. A unique approach of controlling risks is necessary for micro-credit companies to survive and achieve sustainable development. There is a little comprehensive discussion on the risk control of micro-credit companies in the field of law. Further researches are needed in the main risks, the causes of risks, the system and status of risk control in various regions.This paper, in view of the rural finance, with the main risks which micro-credit companies face in daily business as the object of research,analyzes legally micro-credit companies’risks, investigates conditions of risk control from the system and status in six regions, uses foreign useful experience for reference and proposes good suggestions on micro-credit companies in legal control of risks. On generalized, legal control of risks can be divided into internal control and external control(supervision),while the scope of this study is focused on the internal control of risks, namely that from the micro-credit companies’ standpoint, researches the main risks in daily business and puts forward perfect suggestions.The whole text is divided into five parts:the first part is the introduction, mainly discusses background and significance in the paper, reviews the domestic and foreign research status of the problem, and states the main methods of research and the basic ideas.The second part analyzes legally micro-credit companies’risks. The concept of micro-credit companies’risks is defined from the perspective of law and the characteristics are explained.Then the main risks which micro-credit companies face and its causes are analyzed.The third part investigates conditions of micro-credit companies’risk control from the system and status in six regions, abstracts the commonness and individuality from the provisions and sums up the general existing problem (or worthwhile approaches).The fourth part compares four modes of foreign micro-finance and chooses prudently according to the characteristics of China’s micro-credit companies.The last part,in view of rural finance, on the basis of main risks’ causes, according to the existing problems in the system and status, combining foreign useful experience, puts forward to good suggestions on legal control of the risks.The innovation of this paper are as follows:firstly, the concept and characteristics of micro-credit companies’risks are explained from the perspective of law. Secondly, comparing the relevant provisions on the two regulations, the commonness and individuality are abstracted. Thirdly,investigating the conditions of risk control in six regions, the general problems (or worthwhile approaches)are summed up.