Research On The Development And Evolution Of Private Loan In China

Finance is the important carrier of service economy development. As one of financial resource allocation way of private loan, has significant information and operational advantages. While meet the demand of local economy to finance private loan added to the official financial services in the "three rural" and the lack of small and medium-size enterprises. With relatives, friends and so on to participate in the main body of the private loan as a supplement to the formal financial, support to development of medium-size and petty enterprises and agriculture, its existence and development has a certain rationality and inevitability. At the same time, because of private loan supervision outside for a long time, quietly acquaintances society or relational borrowing form change, the main form of private loan from borrowing between natural persons, or will no evolution of organizational behavior, such as to guarantee companies, private Banks, pawn shops, such as small loans company organized for-profit institutions. However, the evolution of form and implication of private loan makes itself exercise significant effects on substantial economy and growth of regular banking.In recent years, the private loan problems emerge. Private loan of spontaneity and blindness which departs from the basic framework based on credit. In raising funds illegally and "shadow finance" for the characteristics of the private capital on a large scale to coal, real estate and precious metals such as capital chain rupture, the debt crisis question continuously eroding the folk financial system in our country is not perfect. Because of capital chain rupture caused by events such as the boss run with disputes occur, in some areas (Wenzhou, Ordos and Shenmu) is particularly serious. How informal lending itself from moderate to weak, deeply analyze the private loan the internal evolution mechanism is the key of this article. While Minsky’s financial instability hypothesis to explain the crisis more convincing. Financial instability hypothesis points out that the economic instability is endogenous, in pursuit of profit of the investment and financing market behavior such as instability, it indicates the fragility of financial system.Stable breeds instability, from hedge our country private loan financing to Ponzi financing is the inner source of its vulnerability to form. In Wenzhou, for example the regional private lending crisis from development, to prosperity, to the irrational fanaticism, to break out, with the rise in the proportion of Ponzi financing, highlights the financing structure of the vulnerability, the private loan the instability of power is more and more strong. Regional folk loan crisis, the government and the central bank’s intervention, may be able to maintain the short-term stability of economy, but the long run can be more serious crisis brewing. Only by constantly improve the country’s financial regulatory system, to maintain the stability of the private lending market and to reduce the harm of the financial crisis. And the root of the reform is to create the healthy development of private loan entity economic foundation. Moreover, a "macro-supervision" mode by "macro-bank" and "macro-government" and reform hypothesis of establishing community development banks introduced by Minsky offer significant means for the development of private financing.