The Development Path Research Of China’s Folk Finance

In recent years, folk finance and informal finance appear frequently in academic papers, government reports and media coverage, the most mentioned is that folk finance risk exposes consistently, it’s necessary to put its standardized development on the agenda of mention. In fact, the folk finance has exsited since ancient times. With the rapid development of economy, the rapid accumulation of private wealth and the rising of internet finance, the folk finance is more enriched and more active. As an effective complement to formal finance, it has providing a strong financial support for the development of the private economy, enriching our financial formats and forms, improving the capital efficient. At the same time, with its concealment, profitable and blindness, it is easier to make the capital "take off the virtual reality", breed financial risk, endanger financial stability and social order. Especially in recent years, some investment companies run away, illegal fund-raising occurred frequently, which put the folk finance into the cusp. We must pay attention to this issue. With this background, the paper is to explore the Path of folk finance development.This paper has five chapters. The first chapter mainly introduces the background, significance, method, literature review, etc. The second chapter describes the theoretical basis of folk finance to demonstrate the reasonableness of the existence of folk finance. and analyzes China’s folk financial scale, form and characteristics, etc. The third chapter describes the positive effects and negative effects of the folk finance on our economy and society, in order to fully play its positive effects and reduce or eliminate its negative effects, it must be regulated. The case of Shandong Province demonstrates the feasibility, but there are still some loopholes in current regulatory system which needs to be improved. The fourth chapter analyzes the successful regulatory experience of the United States, Japan, Taiwan and Hong Kong,in order to get some enlightenment for us. The fifth chapter proposes development path selection of China’s folk financial, which need to adhere to the principles of transparent, institutionalized, effective supervision and flexibility, establish a local government-led folk financial regulatory system, and focus on improving the relevant laws, implementing differentiated regulation of different types, establishing registration system, and strengthening civil credit system, etc.