Research On The Legal Issues Of The Micro-Credit Company

The micro-credit company is a major innovation in the field of finance in China. Since2005,it was piloted in some provinces and cities, showing a vigorous development trend. Especially in2008, the people’s Bank of China and Chinese Banking Regulatory Commission jointly issued "on the pilot micro-credit company guidance", micro-credit companies have sprung up. The micro-credit company is to provide credit services for farmers and micro enterprises. The sources of funds mainly rely on a large number of private funding, like paying capital of shareholders, accepting donations and so on. On the one hand, it could help to improve China’s rural financial system and promote the reform and innovation of China’s rural finance. On the other hand, it can guide the private capital in China tending to be legalized and blow the usury and "underground banks" powerfully which active in the folk currently. But because of our micro-credit companies are still at the exploratory stage and they are immature, they have caused some problems in practice. This paper mainly takes Gansu Province as an example. It thoroughly researches the existence problems of micro-credit companies and proposes some institutional suggestions in order to provide a useful reference to the healthy development of micro-credit companies.This paper is divided into three parts:The first part is about the development overview of the micro-credit company. It mainly introduces the development of micro-credit companies at home and abroad in order to pave the way for the main problems which existThe second part mainly analyzes the existed problems of micro-credit companies in the development, such as setting up and governing are poor, illegal absorbing deposit, exceeding the state set interest rate cap to lend, non-standard contract, mortgage and security settings are not standardized, violent debt is serious.The third part mainly put forward specific proposals from the angle of law to solve the existing problems. The paper put forward that it should improve the establishment of the company and the internal governance, broaden the financing channels, establish the dynamic control of the interest rate mechanism, perfect supervision system, strengthening the support from government and industry self-discipline etc. Only the development of the micro-credit company is long-term and stable, it can contribute a power to the prosperity of rural finance in China.