Judicial Research On The Private Loaning

Private loaning, which has been kept out of the formal financial system for a long time,is a force that cannot be ignored in the transformation of China’s economic development. Onthe one hand, it works as a supplement to the formal financial system, relieving the financingpressures on the micro-and small and medium enterprises. On the other hand, its potentiallyhuge credit risk seriously threatens the financial security and social stability. In recent years,the macroeconomic situation at home and abroad and other effects have triggered theoveractive development of private loaning in China, especially in the Wen Zhou area, wherethe fleeing surge of entrepreneurs together with the phenomenon of universal lending itrevealed have attracted widespread concern and high attention. How to reduce the potentiallyhuge credit risk, and protect the safety of the production and operation and the stability offinancial order becomes a pressing realistic difficulty.This thesis first presents the status quo of private loaning in Wen Zhou and the reasonsunderlying this phenomenon on the basis of the statistics from Yong Jia Court, then focuseson the present legal system of private loaning, and arrives at the suggestions on isimprovement in the whole private loaning system.The whole article includes three parts, i.e., the introduction, the main body and theepilogue.The introduction introduces the background of and the significance in writing this thesis.The recent years has seen the emergence of series of economic and social problems broughtabout by the overactive private loaning among society. Therefore, it is a high priority thatprivate loaning be helped out of the legal and social predicament.The main body is divided into the following three parts.The first part is a statistical interpretation of the private loaning cases Yong Jia Court hasreceived since2008, which shows the sharp increase in the case number, subject amount andthe corresponding average subject amount. In addition, the cases have presented new featureswith regard to the loaning parties, loaning purpose, loaning rates and loaning practice. As tothe surge of private loaning disputes, it can be contributed to the fiscal and monetary policychange and the structural deficiency in the financial binary system from the macroscopicviewpoint, the business difficulties and the hollowness in the real economy from the microscopic viewpoint. In addition there lies the strong motive of profit driving and the weakrisk awareness in the capital investors and the lack of supervision of the law enforcement.The second part presents the legal system of private loaning in China and thepredicament it faces. The author first sorts out the legal provisions in three categories,?i.e.,the provisions that indirectly confirm the status of private loaning, that provide guidance andrestriction, and that of prohibition, and then points out its shortcoming with regard to the timelag between law-making and social development, the lack of systematic organization as wellas the legal gaps.The third part is the most important one, in which the author puts forward somesuggestions on the improvement of private loaning system in the following three aspects, i,e,the legal amendment on the part of the law-maker, the mechanism establishment on the partof the government and the functional reinforcement on the part of judicial authorities.The epilogue is a summary of the whole thesis as well as the outlook of the privateloaning development in the future. The improvement of private loaning system is not only asystematic engineering, but also a social networking which requires the efforts on all parts.