Research On Legal Problems Of China’s Small Loan Companies

Microcredit system is a kind of financial innovation to solve the problem of small andmedium enterprise and rural vulnerable groups financing difficulties，the petty loan companyis one of the important carrier of realizing this system. In our country, since the first pilotproject execution in2005, microfinance company to guide the folk capital, solve the smalland medium-sized enterprise financing, and promote local economic development has playedan important role, through7years of development and perfection. However, because of thelag of legal system construction, small loan companies encountered in practice, such as theunclear legal status, the lack of funding sources, a potential risk serious, some problems ofsupervision mechanism are not sounded, its development encountering "bottleneck", has hadan unprecedented expansion and transformation. In this paper, the main mode and system ofsmall loan companies both at home and abroad successful experience, on the basis ofabsorbing, proposes the solution from the legal Angle of view in the following respects forChina’s a small loan company existing problems at present.Clearing small loans company legal status. First, consider its public welfare for rural areafinancial services functions, China’s legislature should put its positioning for the rural creditagency; Secondly, in defining its status at the same time, to a certain extent, given thecorresponding rights of financial institutions, taxes, can enjoy the same preferential policiesand financial institutions. In our business, allowing its absorb a certain amount of money.Thirdly, for the corresponding liability clause, in a certain financial rights at the same time,also should assume corresponding responsibility.Reducing the market access conditions. Broaden the financing channels, increasing theproportion of financing, broaden the scope of cooperation with financial institutions andmodes, lifting restrictions on small loans company’s registered capital limit, the moderateliberalized capital main body at the same time, encourages asset securitization and issuedprivately raised company bonds to expand funding sources; Relax interest rates, speed up themarketization interest rate, differentiation legislation of loan interest rates, for small loancompanies, interest rate marketization should be put into effect; To expand the business scope, appropriate to broaden the scope of business and cannot cross regional business restrictions.Strengthening the supervision of risk. Perfect the supervision legal system ofmicro-credit company, publish relevant laws to make clear the property of small loancompanies, access conditions, operation rules and risk management and exit, etc; Clearregulatory agencies and their rights and responsibilities.Improving the market exit system. For public welfare as the goal of microfinanceinstitutions, establishing a system of relevant custody and take over; For the healthydevelopment and have a certain scale of small loan companies, positive for the transformationof village Banks and other financial institutions to create convenient conditions reasonably.To perfect the guarantee legal system. To achieve the poverty alleviation of the petty loancompany functions, give full play to the small loan companies to promote the rural financialreform, suggest to actively promote the coinsurance system, perfect the credit guaranteesystem, solve the problem of small loan companies "lack of guarantee" as soon as possible.To perfect the legal system of credit. For the current credit situation for the loancustomers, the petty loan company mainly depends on the spot investigation. In this way，thecost is higher and the investigation conclusion is influenced by human factors, proposed tospeed up the construction of scientific, reasonable, systematic credit system, expand the pettyloan company access to credit information, reduce the petty loan company information costs.Perfecting the tax legal policy. Suggest that microcredit companies enjoy the samepreferential tax policies as the rural credit cooperatives. In the policy of agricultural and smallmicro enterprise loan loss provisions, referencing to national ministry of finance,administration of taxation on relevant preferential policies formulated by the financialinstitutions, can enjoy the pre-tax deduction system of loan loss provisions. Activelyexploring and improving the petty loan company tax policy in our country, helps toaccelerate the development of small loan companies, to speed up the formation diversifiedrural financial organization system.