On The Legal Regulation Of Private Lending Perfection

Nowadays, there is a phenomenon called "private capital ’Barrier Lake’" in current privatecapital market of China. On the one hand, the overall scale of private capital become biggerand bigger. On the other hand, because of lacking strict financial regulation, the civil hugeamounts of money holders cannot find a good investment way. The increasing scale of privatecapital lacks of a better investment returns means, while the majority of small and mediumenterprises and farmers are hard to get financial support from the formal financial institutions.The majority of SMEs and farmers are extremely "hunger" for funds. In this context, this haspromoted the domestic private lending growth deformities and worsening tendency of usury.Private lending behavior is beginning to flourish. Simultaneously, some malignant problemsappear, such as illegal deposits from the public, financial fraud and even violent debtcollection. So the incidence of some cases which involve a huge amount of private lendingfunds, like Wu Ying case, is already a blowout. Meanwhile, due to the characteristics ofprivate lending, such as its dispersion, spontaneity and concealment, it makes the formalfinancial regulatory agencies difficult to play a role. But once the private lending legal lost itsregulatory regime position，then the gray transactions which drifted the formal regulatoryoutside, such as the private lending could easily become the underground banks or mutualassociation of illegal absorbing lending. This is likely to trigger large-scale social problemsand to disrupt the normal financial order, even affect social cohesion and stability.Therefore,how to improve the legal and regulatory system for private lending becomes an urgentproblem.Clarify the concept is to understand the characteristics and things start to solve theproblem, on the definition of the concept of private lending has become the starting point ofthis research and the starting point. By reference to the different views of scholars at homeand abroad, and from the main range of both private lending, legality and financialregulatory point of view, this article will private lending is defined as "relative to formalfinancial terms, the existing law has not been expressly permitted, without obtaining therelevant management approval and registration, and long-term alienation from nationalmacro-control and financial supervision between citizens outside the enterprise (includingother organizations) or between citizens and businesses (including other organizations) byagreement between the occurrence of direct monetary or other price of securities lendingfinancial intermediation activities." On this basis, the spirit of the Chinese folk lendingactivities to achieve reasonable legal norms guiding purpose, we further with Marxist theoryreveals the private lending generation logic, and the implementation of China’s current legalregulation of private lending necessity made careful analysis.However,what’s cannot be ignored, because of our existing legal and regulatory systemof private lending is still not perfect, there is no comprehensive legal and regulatory regimeof private lending, private lending plus stage expanding the scale and scope, showing a lot ofnew features on China’s private lending laws and regulatory systems to form a new challengeand a strong impact. The reality of the situation makes all sorts of private lending legal andregulatory always have flaws, there are many troubles. In order to improve the legal and regulatory regime of private lending, while we shouldbe outside the relevant country to learn from the advanced experience and practice, with itsexperience of failure or measures admonition; hand or to adhere to the guidance of Marxism,dialectical view private lending in China’s economic development role in the law for theprivate lending to provide certain legal living space, follow the principle of modest financialmarkets, as well as taking into account the principles of development controllable regulatoryefficiency and fairness. So that we can improve our private lending legal and regulatoryregime, a reasonable guide and standardize the size and form of private lending, privatelending embarked let sunlight, standardized development path.