Research On The Legal Regulation Of The Private Lending Market In China

Private lending,as a kind of spontaneous folk financial activity,has been growing quite rapidly in recent years owing to its flexibility,simplicity and other characteristics.Private lending contributes to breaking monopolize status of standard financial system,relieving financing difficulties of medium small and micro-sized enterprises,and boosting the development of private economy in our country.However,a large number of problems occur in our private lending under the influences of factors from international economic trend,national economic society,legal environment,and the management of lending parties.Problems above are as follows: market chaos,high interest,companies' escaping,risks out of control,worsening of enterprises' hollowing out,which does serious harm to social stability and economic development.This article comprises three parts: the first part introduces the definition,main styles and major characteristics of private lending in our country.It also analyzes the functions of private lending in China.The second part makes a discussion on causes of problems based on current situation and existing main problems occurred in our private lending market.The third part supposes the idea of regulization of private lending market in China,from the point of view of five aspects below: perfecting laws and rules in private lending market,establishing penalty compensation regime to cope with the malicious debt evading from levantors,preventing and punishing false lawsuits and malicious actions on private lending,strengthening qualification imprisonment system to violating debtor in private lending suites,reinforcing the duties on persons in charge in private lending.Some Suggestions on Encouraging and Leading Healthy Development of Private Investment released by the State Council on May 13 th,2010 puts forward the encouragement of private capital to integrate into financial activities in our nation,which consolidates the attitude on nation's support on private lending,shows the great progress of capital raising system and the strengthening of capital raising environment.However,there is a great need of legalization and related laws and rules to private lending market should be perfected so that such disengaged and mass private capital could have a reasonable investment and financing ways,there could be strict restraints and regulations on private lending market,thus leading the private lending market to develop in a healthy,reasonable,and orderly way.