Research On The Legal System Of Folk Credit Of High Interest Rates

The Folk Credit in our country has a long history. During the long development of the nongovernmental credit, it keeps developing. After the reform and opening-up, China’s economic development grows pretty fast, small and medium enterprises under the two-track system in the financial have some difficulties in financing. With the booming Folk Credit, the problem of financing certain, in some sense, releases. But many negative effects then follow. Thus, this paper attempts to research on the high rated Folk Credit.After the reform and opening-up, with the development of economic, small and medium enterprises under the two-track system in the financial, were facing financing difficulties, which lead to a serious impediment to the further expansion and development of these enterprises. In recent years, with the booming of Folk Credit, the problem of financial shortage was partly solved. However, along with the booming of Folk Credit, the absence of laws and regulations in the area of operation and supervision of Folk Credit leads to the appearance of many problems and negative impacts in the judicial practice. Under this situation, how to define Folk Credit? How to deal with the legal status of Folk Credit? How to resolve the problems in the judicial practice in Folk Credit? This series has become the urgent problems of the Folk Credit market and the further development of SMEs in China.The article reviews the existing literatures on the high-rate Folk Credit, and expounded the status and significance of the research in this article from the background. On this basis, I try to cut in from the specific cases in the judicial practice and dig out the causes and problems in the high-rate Folk Credit. Finally, I try to put forward a solution of the problems in high-rate Folk Credit.This article divides into five parts.Chapter Ⅰ is a review of existing research. The literatures are arranged by three aspects:the status quo of Folk Credit, the interest rate of Folk Credit and the decision factors of the interest rate of Folk Credit. First of all, from the status of Folk Credit, either at home or abroad, the total amount of the capital occupied by the informal financial institutions represented by the Folk Credit are very huge (from 30% to 70%). Secondly, In terms of the interest rates, there are more paid lending than unpaid in Folk Credit. The general rule is the interest rates of Folk Credit are higher than bank borrowings, and the rates are continually going down. Thirdly, summarized the reasons offered by domestic and foreign experts of the high interest rate of Folk Credit. Meanwhile, the paper puts forward ideas and research methods of this study.Chapter Ⅱ starts from a case. This article triggers from Wu Ying’s case, then discuss the concept of high interest rated Folk Credit, the forms of high interest rate Folk Credit and legal risks of Folk Credit in high interest rates. Firstly, we should define the concept of Folk Credit. In this paper, by studying the positive law, I found out the real meaning of Folk Credit in the specific legal context. At the same time, combined with the Civil and Commercial Law theory, we explore the full legal concepts of high-interest-rate Folk Credit. Secondly, we try to find out the main forms of high-rate Folk Credit on the basis of analysis of the manifestation of the high interest rate, explore the legal nature of the high rate of Folk Credit. Thirdly, from the two aspects of the high-rate Folk Credit, we try to analyze its legal nature. Finally, on this basis, we try to tell the differences between easily confused conception, illegal fund-raising, and high-rate Folk Credit. And, at last, we point out the legal risks of high-rate Folk Credit.Chapter Ⅲ analyzes the causes of the high rated Folk Credit. This article starts from the emergence and development of Folk Credit, then to the inevitability of the exist of Folk Credit, and go on to the causes of the high interest rate of Folk Credit, and finally go to the effects of high interest rated Folk Credit. First of all, we are going to observe the emergence and development of Folk Credit through a short comb from the historical dimension. Secondly, we try to analyze the reasons why high-interest Folk Credit exists. Profiling from the market, credit and economic interests, I find out the rationality of the existence of the high-rate Folk Credit. Thirdly, I try to investigate the very reasons of the existence of high-rate Folk Credit. Finally, through a comprehensive view of the foregoing, I want to investigate the impact and development of the high-rate Folk Credit.Chapter Ⅳ focused on finding the current legal issues of high interest rated Folk Credit. This paper tries to find out the inadequate legal issues the legislative and judicial aspects.Chapter Ⅴ offers some resolutions to the inadequate of legal issues. I try to design the resolution from three aspect:legislative, judicial and supporting measures. In terms of the legislative, unified and clear principles should be build in order to eliminate the conflicts in the law. From the aspect of judicial, the occupation of the judges given by law should be used during this situation. Finally, some supporting measures should be taken to help to resolve the problem.