The Effect Of The Development Of China’s Consumer Finance Industry On Residents’ Consumption Demand

In the background of the financial crisis, China’s economic development rely solely on exports and investment has already unsustainable, through expanding domestic demand and enhancing residents’ purchasing power to stimulate economic growth has become a consensus. Consumer Finance plays an important role in our financial market, which refers to a number of professional financial institutions through providing credit products to families or individuals to meet their excessive consumption. The appearance of Consumer Finance not only can make up some of the gaps in our financial services industry, but also can provide consumers with a variety of credit products and financial services. Therefore, this paper attempts to explain that the development of consumer finance industry has becomemore and more significant for stimulating domestic demand and promoting economicdevelopment.This paper first introduces the basic concepts of Consumer Finance and consumer demand, and analyzes the current situation of the development of consumer finance industry. Then, according to the relative income theory, the classic regression model of consumption, income and credit scale is established.In order to show the influence of per capita consumption credit balance on the per capita consumption expenditure, on the premise of Chow test, the time interval is divided into three stages by introducing two dummy variables.By analyzing the variation of the estimated parameters of each stage, the influence of the variation of the parameters is analyzed.The empirical results show that the stimulation effect of consumer credit on consumption demand is gradually increased, stimulating effect of income on consumption demand is gradually weakened.Finally, in order to better stimulate consumer demand and economic growth, this paper puts forward some policy recommendations such as transforming the concept of consumer spending, accelerating the consumption of financial innovation and so on, to better develop consumer finance industry.