The Research Of Consumer Finance And Economy Growth

Consumer finance is a kind of financial service that provides loans to residents or familiesto allow them to consume before they have enough money to pay. Since1990s, consumerfinance has developed quickly in our country with the scales of loans being amplified andexpenditures from the loans being widened. And now consumer finance has become animportant section of our financial market. The specific development of consumer finance cansatisfy the increasing demanding of consumer loans from Chinese public, making it possibleto widen the domestic demanding and contribute to economic growth. But there are negativefactors existing that block the development of consumer finance, such as residents’reluctances to accept the idea of borrowing money to consume, low personal income, lowlevel of consuming and the lack of confidence and ability to pay back consuming loans. Otherproblems include that the system of personal credibility is unsound and the institutions andestablishments offering consumer finance service are not enough.This lecture will introduce consumer finance in China and the enforcement it offers for thegrowth of China economy with the following respects.The first part gives an overview of consumer finance and its advent and development inChina, also including the institutions and establishments that offer the service of consumerfinance. Finally the lecture represents the benefits of consumer finance to economy andsociety.The second part gives us some descriptions of consumer finance in China, featuring thatthe long and medium loans occupy a majority of the loans for consuming. It also mentions thevarious problems consumer finance faced in China, such as there are much fewer institutionsand establishments existing in china compared with other developed countries in the world,the ceilings for consumers of the service are too low. To make things worse, it is hard forChinese people to borrow money for consuming ahead of time because of the bad predictionof income, which weakens their confidence that one day in the future they could pay off thedebts they owe.The third part uses quantitative analysis method to analyze the influence consumer financehas on the economy. With the annual data of consuming and GDP, we could get theconclusion that the impact consuming has on economy is much more significant than theimpact investment does by the the least squares method. The loans consumer finance offerscould promote the consumer’s demanding for consuming, which will facilitate the finalconsuming. Through the analysis of the relationship between final consuming of residents andGDP respectively in all the regions of China, it is not difficult to find the impact of finalconsuming on the economy is significant. Finally, using the same method, we get theconclusion that the stimulation consumer finance has is effective.The very last part of the lecture is about measures and solutions to ensure the healthydevelopment of the consumer finance. First of all, government should complete the evaluationsystem; secondly, the relative departments should publicize the idea of consumer finance,changing the attitude of Chinese residents towards consuming before they have enough money. Thirdly, the relative administrative departments should strengthen the supervision andincrease the scale of companies that offer consumer finance service, the legislationdepartment should further the completion of laws to regulate consumer finance. What’s more,a specific department should be built to evaluate and record consumer’s documents. Finally,China should continue to improve the income of residents, ensuring they have enoughconfidence to borrow money for consuming.