The Improvement Of The Legal Regulation Of Private Lending Rates

With the prosperous growth of the economy in recent years,the position of private lending in the credit financing market has become increasingly important.The existence of private lending,to some extent,solves the small and middle enterprises'difficulty in financing,and enhances the self adjusting ability of the economy,and thus makes private lending a necessary and beneficial supplement to the formal financing.However,as private financing is away from the formal financing,there also exist certain problems,including the non-transparency of the deal,the uncertainty of legal position,and the difficulty of supervision.There is a urgent need for legislation on private lending for the prosperous of give proper instruction and guidance to it.Thus,the question of how to complete the regulation on the interest rate in private lending,how to make reasonable interest rate standard,how to enhance the effective supervision on private lending,shall be given priority.Since there remains certain conflicts and inconformity in the current legislation system needs clarification,the writer believes this topic is worth discussion in from both practically and theoretically,and it is necessary to conduct further research on this topic from both legislation aspect and legal practice aspect.This article,excluding the prolegomena,introduction,and conclusion,will conduct research and analysis in four parts.In the first part,the basic concept and the connotation will be introduced,and the concept of private lending,which is a capital financing activity that the capital and interests shall be paid at the due date,and is not under the direct supervision of the authority,contrary to formal financing,and happened in the free market.A discussion on the regulation on interest rate of private lending will be followed,for the purpose of lay the groundwork of further research.In the second part,an analysis on the current situation in detail and problems exist in the current regulation on the interest rate of private lending will be presented.The lack of specific regulation on the identification of borrower's voluntarily paying interests,the deduction of the interests from the capital,and the calculation of compound interest has led to a series of problems in the legal practice,including the legislation being unable to directly and effectively guide and instruct the private lending activity between the parties.These problems require to be fixed by the continually completion of the related legislations.In the third part,a comparison of the interest rate in both China and foreign countries will be illustrated.The research of regulation on interest rate of private lending starts relatively late,and such research and explore is more mature in foreign countries,compared to those in China.Compare and learn from the advanced regulation system on interest rate of private lending in Japan,United Stares,Germen,Italy and other foreign countries will help researchers and legislators in China to gain more experience.In the fourth part,a discussion on the choice of path for private lending legislation in China will be conducted.Currently,the highest priority shall be given to the making of specialized laws which suits the current situation of the private lending in China.At the same time,other law s and regulations related to private lending shall also be completed.Besides,the supervision authority and supervision measures shall be clarified to achieve the legalization and normalization of private lending.