The Research On Legal Problems Of Micro-load Company In China

Micro-credit system is a financial innovation system to solve the financing problem ofsmall and micro enterprises and rural disadvantaged groups. And small loan company is animportant carrier of such a system. From the initial pilot exploration, small loan companiesare facing the dual task of shouldering policy to poverty alleviation and providing financialservices in China. Although which are rapidly develop, the system construction is very lag,facing the unclear legal status, lack of funding,potentially serious risk, the regulatorymechanism is be not perfected. The sustainable development of small loan companies will bequestioned. Based on this, we intend to sort out the relevant laws and regulations and policiesfrom the status quo and problems, to analyze its vulnerabilities and weaknesses, to explore theroot of system causes and to comparative research methods to analyze the foreign successfulmodel, to learn from the experience, and finally provide some recommendations about how toimprove the legal system of China’s small loan companies.In this paper, the main sections will be discussed as following:The first part, the introduction includes the research background and significance and thestudy objectives and methods, recalling nearly seven years of development of the small loanin China. And this part summarizes and evaluates the research literature about micro-creditand small loan companies at home and abroadThe second part is about the theoretical basis of the small loan companies. Domestic andforeign scholars have different definitions about the connotation of small loan companies andmicro-credit organizations. On the basis of studying domestic and foreign research results,this paper defined the concept of micro-credit organizations.The third part discusses this part explored the development and practical significance ofsmall loan companies, from the perspectives of the theoretical basis for the development ofsmall loan companies, the social capital, credit rights, and the financial system.The fourth part discusses the current situation and operations problems of small loancompanies practicing in China. Since2005, our country set up the pilot of the small loancompanies, which play an important role for realizing the right of small and medium-sizedmicro-enterprises and rural credit. But there are many problems during their development, such as the high barriers to entry, poor supervision, exit mechanism is not sound and otherproblems, and then analyzes the causes and phenomenon of these problems.The fifth part analyzes and learns from the legal system of foreign MFIs. This sectionmainly analyzes two modes of the International Microcredit organizations (the welfare modeand system mode) and its experience which inspire the development of Chinese small loancompanies.The sixth part is about how to build a legal system for small loan companies in China.Improvement of the legal system is not only good for ensuring the sustainable development ofsmall loan companies, and better to further ease the problem of financing of China’s small andmedium-sized micro-enterprises and rural disadvantaged groups.At present, China’s smallloan company have many problems, such as legislative level is not high, the conflict of lawsand regulations. The paper will propose some specific legal advice from the perspective of themarket access, business scope, company management and exit mechanism, and discusses theimprovement of some related system, such as the guarantee, the credit and tax system.