A Legal Research On Informal Financing Of Chinese Small And Micro-sized Enterprises

In the background of the development of economic transformation in China, Small-micro businesses support for the development of our economy in a powerful form. Onthe one hand, the growing number of Small-micro businesses created a hugeeconomic wealth; on the other hand, Small-micro businesses provided a large numberof employment opportunities, alleviated the employment pressure and maintain socialstability. Although the economy development of our country is steady, but Small-microenterprise financing is still have no effectively way to solve the financing problem.Small micro enterprise endogenous financing is insufficient, combined with its ownguarantee ability is poor, factors such as information asymmetry, it is difficult to fromthe "little", pay attention to the formal financial institutions to obtain silver fund securitymoney to help. A large number of small micro enterprises have to turn to the informalfinancing institutions to solve financing thirst. In fact, the informal financing and smallmicro enterprise also more fit. Informal financing is more advantageous to overcomethe problem of asymmetric information and transaction costs low and fast andconvenient, can better adapt to the small micro enterprise financing’ feature of "short,poor, nasty".Informal financing for solving the problem of financing difficulties inpromoting small micro enterprise but also the existence of a series of risks. Small microenterprise financing is a folk law in China and outside the formal financial regulatorscontrol the financing form, its most financing behavior is still in a state of"underground". When informal financing based on geography, kinship is destroyed,after a single breach credit makes frequent small micro enterprise informal financingrisk, caused many social problems. So to strengthen the legal regulation of small microenterprise informal financing is urgent.Our country’ law in the Small-micro enterprise informal financing problems in theplace such as legislation, regulation, guarantees. Under the influence of the financialfranchise system in our country, our country no special legislation of the informalfinancing small micro enterprise and for the informal financing presented the state of"administrative supervision, punishment subsidiary". Also shortcomings in regulation,regulatory agencies is not clear that small micro enterprise informal financing isdifficult to get effective management; The lack of market access and exit mechanismmakes small micro enterprise informal financing market chaos. This paper mainly adopts literature research, empirical study and comparativeresearch, using the related theory as the support of finance and economics, through theanalysis of the existing legal system in our country, this paper expounds the currentlegal system of small enterprises in our country informal financing, the defects ofcomprehensive draw lessons from foreign advanced experience, put forward to thesmall micro enterprise informal financing system and the perfection of relevant laws:First of all, improve small micro enterprise informal financing legislation. Modifythe "SME promotion law" as soon as possible and formulate detailed rules for theimplementation, to ensure that small micro enterprise financing and other laws; Removebanned companies apart each other between the terms of the funds; Encourage all kindsof informal financing play to their strengths, innovation and development, in line withthe small micro enterprise financing needs of creating new forms, and emerging formsof informal financing into the scope of legal regulation; Reasonable interest rate cap andgradually opening rate control.Secondly, improve small micro enterprise informal financing legal supervisionsystem. Set up small micro informal financing industry association; Set up perfectmarket access and exit system, widen the channel of the informal financing entering theformal financial sector, the introduction of enterprise bankruptcy system and personalbankruptcy system; Perfect the regulatory authority of banking regulatory commission.Finally, improve small micro enterprise informal financing credit guaranteemechanism. Establish local governments with multi-level guarantee mechanism,strengthen the information disclosure, promote informal financing solve small microenterprise financing difficult problem.