Research On Legal Prevention And Control Of Risk Of Cash Loan In China

Under the background of insufficient breadth and depth of traditional financial services,with the development of Internet and big data technology,the transformation of P2 P online lending under policy supervision,and the formation of peoples’ consumption habits in advance in China,the cash lending sprouted in 2014 developed rapidly.Cash loan is a double-edged sword.On the one hand,it meets the requirements of Inclusive Finance due to its convenient and efficient features,small amount,short term,no scenario requirements,no geographical restrictions,etc.,which solves the lending needs of lending needs of some groups excluded by traditional financial institutions;On the other hand,due to the absence of supervision,with the rapid development of cash loans,there are many risks such as high interest rate,high bad debt rate and improper collection,so it was called “disguised usury”.At the end of 2017,with the implementation of regulations such as licensed operation and real interest rate must not be higher than 36%,some cash lending platforms did develop in the direction of compliance,but it also led to the bankruptcy or transformation of most cash lending platforms that were difficult to meet the compliance standards,which made the market competition inadequate.The group that usually has a strong dependence on cash loans can′t meet their borrowing needs from the formal way,so they have to seek for borrowing opportunities from the informal way.For a while,various varieties kinds of cash loan modes emerge in an endless stream,and even promote the popularity of underground usury.Instead of pushing the subprime credit users who need to borrow to the underground usury which is in the gray area and difficult to be supervised,it is better to turn these users over to the cash lending platform which is dedicated to regular operation and in the sunshine.Therefore,the purpose of this paper is to solve the problem through in-depth analysis of China’s cash loan,at the same time,reverse the public’s bad impression of cash loan,and promote the healthy development of the cash loan industry.There are five parts in this paper:The first part is the introduction.It mainly introduces the background and significance of the topic,literature review,research methods and innovation.The second part is the basic theory of cash loan.It mainly introduces the connotation,development process and significance of cash loan.The third part is the analysis of risks of cash loan.Based on the introduction of the main risks of cash loan,such as abnormal high interest rate,high bad debt rate and improper collection,this paper analyzes the causes of these risks from the user group,cost,risk control and supervision of cash loan.The fourth part is the experience of the foreign legal prevention and control of risks of cash loan in China.Based on the analysis of other countries’ cash loan,this paper systematically summarizes the experience of legal prevention and control of risks of cash loan that can be used for reference in China.The fifth part is the suggestions l on improving the legal prevention and control of risk of cash loan risk in China.In view of risks of cash loan in China and the causes of these risks,this paper puts forward suggestions that the legal prevention and control of risks of cash loan from the aspects of interest rate,credit investigation,information disclosure and collection.The sixth part is the conclusion.On the premise of confirming the value of cash loan and analyzing the attitude of regulators towards cash loan,facing the problems existing in the whole field of Internet financial risk prevention and supervision in China,this paper puts forward that we should correctly deal with the relationship between financial supervision and financial innovation,take the protection of financial innovation as the foothold,and promote the healthy and orderly development of Internet financial industry in China.