The Research On The Operation Risk And Regulatory Measures Of Micro-loan Company

Micro-finance is regarded as one of the most effective means of helping the poor become rich internationally. Both poor credit in developing countries such as Bangladesh, Indonesia and consumer credit in developed countries such as United States and Japan provide low-income people with help. Because of this some companies and individuals get a greater development. China’s micro-finance starts late due to the lack of manpower, knowledge and financial resources, and its developing model is at the exploratory stage. In order to tackle the financing problem for minor enterprises and agriculture economy, China started the pilot operation of small-loan companies. Small-loan companies entrusted with trade mission to guide private financing becoming standardized play an important role in the development of local real economy. Small-loan companies shouldering the mission to open up "the last one kilometer" of small micro-financial services, to put down roots in counties, to shorten the financing chain, to reduce financing costs, to serve for the regional entities and to support local development have advantages in the area of industrial chain, supply chain, consumption chain and social chain. By the end of 2014, the small-loan companies has been developed nearly 10 years, the number of which is up to 8791, and the credit scale amounts to 942.038 billion. This is fully demonstrated its rapid development trend.With the rapid expansion of small loan companies, there have been many new situations and problems, such as the boss running, illegal fund-raising, loan-sharking and so on. While active in the private financial markets, commercial micro-finance companies have to think about a series of problems:How to position the identity of small loan companies? Whether small loan companies have the ability to financing for minor enterprises or individual businesses? What are the major risks existing in business operating? What methods can be used by regulatory to supervise? It is the only way to address these problems, to guarantee the health and sustainable development of small loan companies, to improve China’s rural financial system, to regulate the private capital market and to implement the purpose of serving for minor enterprises and agriculture economy that improving the government regulation of the small loan companies’operating risks. Therefore, conducting further research about government regulation of small loan companies has obvious theoretical and practical significance.This study explains the current development situation and existing problems of China’s small loan companies. It analyzes the five major risks existing in the process of operating:the policy risk, the market risk, the credit risk, the compliance risk and the liquidity risk. Furthermore, it ascertains the causes of these risks. At the same time, this study tocuses on the current regulation situation of small loan companies pointing out existing problems. On the basis of the relevant abroad regulatory experience, this study provides comprehensive and effective measures to regulate small loan companies in order to promote the health and rapid development of China’s small loan companies. The innovation point of this study is that it is in the perspective of government to analyze the operating risks of small loan companies and to propose practical measures.