Research On The Operation Mode Of Chinese Consumer Finance Companies

Investment,export and consumption are the three carriages for China's economic exports.With the development of the country's economy and the decline of the investment and exports,to promote consumption has become the top priority of China's development.As one of the most important means of stimulating consumption,consumer finance is being highly valued by the state.Since the launch of the approval workflow of Pilot Costumer Financial Companies,China's consumer finance industry has entered a stage of rapid development.At present,with consumer finance industry products and services the products and services being diversified,the institutions providing consumer financial services in China's market include commercial banks,consumer finance companies,e-commerce companies,Internet finance companies and vertical consumer finance platforms.However,problems such as product homogeneity,low market acceptance and unsound social credit system still restrict the development of the consumer finance industry in China.Thus,there is an urgent need for a mature operation mode within the industry to mitigate or solve these problems.As a licensed consumer financial institution approved by the China Banking Regulatory Commission,the development of consumer finance companies should take the lead in the whole consumer finance industry.Therefore,this article chooses the consumer finance companies as the research object to study its operation mode,providing references for China's consumer finance industry.This article starts from the background of the consumer financial companies by reviewing the related documents at home and abroad.On this basis,the article will make a definition of the relevant concepts of consumer financial companies in China and some statements about Absolute Income Hypothesis by Keynes,Relative Income Hypothesis by Milton Friedman,Life Cycle Hypothesis by Modigliani,Random-walk Hypothesis by Hall.As well,this paper classifies the operation modes from the three perspectives of financing mode,business mode and risk control mode.Subsequently,this article introduces the status quo and operation modes of domestic and foreign consumer finance companies and conducts a comparative analysis.Finally,taking the case of Bank of China Consumer Finance Co.,Ltd.as a case,this article introduces it from the aspects of shareholder composition,organizational structure,asset status,and operating conditions,and the article also analyses the advantages and disadvantages of its current operation mode combining the company's development status and the operating model.According to the theoretical analysis and case studies,this paper puts forward that China's consumer finance companies have problems such as a single financing channel and product homogeneity.It is necessary to liberalize restrictions at the policy level and continue to encourage consumer finance companies to adopt methods such as issuance of financial bonds and asset securitization to broaden the sources of funds.In addition,China's consumer finance companies need to pay attention to the accumulation of scenes,continue to improve risk control technologies,and seek a differentiated competition in order to achieve a better development.