China's Equity Crowdfunding Credit Risk And Its Prevention Research

Equity-based crowd-funding industry has witnessed a tremendous increase,with its quality and quantity growing.Not only it enhance various ways for investment,but it can better the channel for raising money,all of which are conducive to improving the efficiency of the financial market,supporting the start-up,and propelling economic structure.To some degree,equity based crowd-funding has decreased the cost of acquiring information,but some cheating information has been also included,making it possible for the participants to commit some credit risks and some bad demeanor happen.With the accelerating development of such industry,the credit risks has arisen and growing more concern,such as collapse of companies,the disappearance of boss and cheating.This essay first introduced the relevant concept and the basic theory and analyzed the development situation of the equity industry and present situation.next,the types of credit risks the causes of such risks were explored from the micro and macro angle.Through the analysis,some important discoveries were displayed:there are some laws needed to be enforced;nominal holding of shares are the main reasons;the problems of dishonesty of borrowers and variety of their purpose were covered;,Unable to choose the right investors and the sole way of earning profit were also concluded.After that,a special case of M Y J were cited to analyze the special point of the credit risks and propose some feasible measures.Finally,some preventive measures were adopted from the macro and micro angle.For instance,to begin with,some laws should be introduced to ensure the authority;Secondly,the third evaluative institutions should be introduced to manage;thirdly,some models and the fund supervision by the third party are well-advised to be set up;additionally,better method of creating profit,educating the investors and supervising the industry with more financial method ought to be built up by the government and the industry.