Study Of Private Lending Impact On Commercial Bank Credit Business

Since China’s reform and opening up, the private lending has graduallydeveloped into an integral part of China’s financial system and made a positiveinfluence on the development of the China’s economy. In the meantime, it has broughtgreat impact on the credit business of the commercial bank in China. Conducting thestudy of the relationship between private lending and commercial bank credit businesswill help to deepen the reform of China’s financial system and promote economicdevelopment.The paper proceeds as follows. The first part is the introduction. It begins withanalyzing the background, purpose and significance of the study of, followed by theliterature review regarding private lending and the credit business of the commercialbank, including the defination ad causes of private lending, private lendingdevelopment and commercial banks credit business development status. Furthermore,it pointed out that the contribution and deficiencies of the article. The second partdetails the basic theory of private lending and commercial bank credit business,including private lending The theory of financial repression; The theory ofasymmetric information and Theory of institutional change and commercial bankingcredit business The theory of transaction cost; The theory of financial symbiotic andThe theory of credit rationing. The third part presents the current development ofprivate lending and commercial bank credit business, mainly analyzing the currentsituation and the comparative advantages and disadvantages of private lending andcommercial bank credit business The fourth part describes the influence of the privatelending on commercial banks, from positive and negative point. From the positivepoint, private lending makes up for the lack of commercial bank credit and easeborrowing pressures and promote the innovation of commercial banking products.However, private lending reduces capital inflow of commercial bank, occupying thecredit space and increasing ricks. The fifth part makes a comparison on thedevelopment models between developed countries and undeveloped countries. Thepaper closes with providing some advices on the development of private lending,based on the previous analysis.