The Legal Governance Of Private Lending And Its Improvement

Under the implementation of financial repression in our background, noproperty collateral and guarantees small and microenterprises andself-employed persons wanted from the formal financial system, financing isvery difficult, small and micro enterprises and self-employed persons have toturn to private loans. Therefore, as an important supplement to the financialmarkets and the economic development of small and micro enterprises animportant condition for the individual, private lending has played anincreasingly important role. But China’s current legal system provides veryfew private lending, on the one hand led to unprecedented prosperity anddiversity of private lending interest rates, then, on the other hand also led to acorresponding rise in private lending risk. At this stage, our urgent need forlegislation legalizing private lending and through its multi-level channels tobe standardized, so as to avoid the risk while maximizing the complementaryroles of private lending to capital markets and indirectly promote reform ofthe financial system and perfect.