Regulation And Development Of The Informal Finance

Informal finance is a very complex and disputable problem. Although it has many drawbacks we can not deny its value and its existence. Informal finance becomes more and more active with the boost in Chinas economy. On the one hand, the form of the informal finance is flexible and procedure is simple. On the other hand, the informal finance meets the routine of trade and social psychology. Informal finance relieves difficulty for the finance of small and medium enterprises and improves economy. At the same time it solves the deficiency of the formal finance. But the informal finance has many defects, such as irregularity of management, lack of risk management, and so on. The informal finance brings forward negative effect on the finance and macro-control efforts. So it has materialistic significance to discuss the standard improvement.The informal finance has different forms and regional difference. This dissertation studies the legal means for regulating the informal finance by the use of historic analysis,case analysis, empirical analysis and normative analysis.The dissertation defines the concept of the informal finance. Firstly, the dissertation introduces the evolution of the informal finance of our country and considers that the informal finance has its consistency. The dissertation explains the reasons of exsistance and development of the informal finance by use of the asymmetric information theory, transaction costs theory, financial repression theory. Secondly, on the basis of reality the dissertation brings forward the legal plight of the informal finance. The plight is the definition of legality and illegality of the informal finance, the choice between marketization and officiality of the interest rate, and the combination of power and obligation. Finally, the dissertation thinks that the authority should make and revise the concerned laws and regulations, apply and abide by the custom law for the informal finance in order to regulate and improve its development.