The Research On Legal System Of Risk Management And Control Of Micro-loan Company

Since China highly valued and vigorously promoted micro-loan company from 2005,micro-loan company has been regarded as an innovation pattern to release the contradiction of supply-demand of rural finance,develop the rural economy and establish the inclusive finance stystem. In the nealy 10 years development,the micro-loan company in China has rapidly expanded in number,scale and the loan amount and became a beneficial addition of rural financial market. However,delistings or revocations of the business licence of the micro-loan company in some provinces in recent years have indicated the requent risks of the micro-loan company caused by illegal operating such as illegal financing and large lending.Baseing on the development of the micro-loan company of China,this article analyzes the current situation of micro-loan company risk,according to the cases of the compulsory withdrawal of micro-loan company in Inner Mongolia Autonomous Region and the delistings of the YinLong Limited Liability Company in Gansu Province and the QianGui Limited Liability Company in Guangzhou,and then points out that instead of serving to agriculture,rural areas and farmers and medium-sized and small enterprises under the guidance of the principle of small amount and dispersion,because of funds and profit,some micro-loan companies of China participate in some hot and non-agricultural industries,for instance,real estate,which leading to increased operating risk and putting a brake on sustainable development for themseleves.From the law perspective,the article clarifies the current legal system on legal basis,subject,substance and measures of risk management and control of micro-loan company of China. Meanwhile,through the legal analyse about the risk factors of the micro-loan company of China,the article holds that the legal origins of risk include low legislation level,not-clear supervisory institution and legal nature,improper regulations,imperfect internal control mechanism,unsound agricultural insurance legal system and rural credit system.As the innovation pattern of microcredit in China,the credit-only micro-loan company of China is one type of Non-Deposit-Taking Lenders. Hence,with the practical experiences on risk management and control of Non-Deposit-Taking Lenders and Microfinance Institutions in other countries and areas,the article proposes that China is supposed to improve the legal system on risk management and control of micro-loan company by means of enhancing the micro-loan company legislation level,defining the legal nature and supervisory institution of micro-loan company,loosening up relevant regulations,perfecting internal control mechanism,establishing industry self-discipline system and strengthening agricultural insurance legal system and rural credit system. With the expectation on the sustainable and steady development of micro-loan company,China should endeavor to promote the legal system to well match the commercialized operation and the original intention of micro-loan company to serve to agriculture,rural areas and farmers and medium-sized and small enterprises,and make a contribution to the standardized operation of micro-loan company under the baseline of no illegal-financing and the principle of small amount and dispersion.