Studies On Legislation Of Micro Loan Company

Chinese government has been tightening the country’s monetary in the recent years,microcredit companies have been a very positive force to promote the local economicdevelopment. Microcredit companies have been playing important roles in the financing of“three-rural” and small to medium enterprises. In this article we used Guangdong provinceas an example, focusing on the actual situation in Guangdong microfinance pilot, to studythe legal issues which have been hindering the development of microcredit companies.This article is divided into four parts. The first part introduces the overall development ofmicrocredit companies in China and the related national law and regulations. Upon thatwe further discuss the development and legislative status of microcredit companies inGuangdong.In the second part we point out a series of issues microcredit companies in Guangdonghave encountered, which includes unclear legal status, shortages of funds, asymmetry ofcredit information, poor oversight and hard to resolve dispute. We also analyze the cause ofthese legal issues.We discussed what microcredit companies in Guangdong can learn from the developmentof microcredit companies in China and around the world in the third part. We comparedZhejiang Province’s and Hong Kong’s microfinance regulations and analyzed them to findinspiration. We also studied cases from several developed and developing countries and getinspiration by combining the actual situation of Guangdong Province.In the final part of this article we focus on the legal issues mentioned throughout the article,we tried provide possible solutions to every legal issues that have hinder the advancementof microfinance in Guangdong. We hope these solutions, can help to build a better legalenvironment for the development of microfinance companies in Guangdong province.