Small Loan Company Development Policy Research

The emergence of small loan company is the product of ourcountry’s deep reform on Finance, which has also demonstratedgovernment’s management function. From2008to date, after morethan4year’s operation, this type of financial support hasclarified area’s financial structure, and thus supported manysmall and micro enterprises in the region. Small Loan Companygives sunshine to illegal private financing funds and furtherstandardizes the dispersion of private funds; it gives somefinancial support to small and micro enterprises that are lackof guarantee, mortgage and conditions requested by bank when intheir urgent need of credit support. The operation mode of smallloan company is significantly stronger than private lendingconcerning the legality, compliance and security, which isconducive to the legalization and Intensification of private capital. Small Loan Company has distinct regional characteristics,it has clear target positioning, and it services area’s smalland micro enterprises; it has high sensitivity of the vulnerablegroups, small and micro enterprises, and the three ruralenterprises who have financing difficulties and can effectivelyalleviate vulnerable groups ‘funding crisis.Meanwhile, small loan companies are mixed up by good and badones, the entire industry’s self-regulation and supervision,internal and external risk prevention have become a top priority.Government’s small loan company policy is broad, unclear onpositioning, and unknown on the direction of future development,which is not conducive to long-term development of the small loancompany. This article based on the course of business of EastHongqiao small loan company, made a brief discussion on theexisting risks, and proposed some policy-related suggestions.