Is private lending a big problem in China?

1. Lender liberalization in private lending is the general trend. It is an inevitable requirement to overcome financial repression, break the formal financial monopoly and improve the overall development level of the financial industry. This is also a common practice in many foreign countries. At present, China has implemented an open market economy, established the principle of civil law autonomy, and successfully launched a small loan company, which has met the corresponding conditions for all lenders to liberalize. The state should distinguish between civil lenders and commercial lenders when implementing liberalization policies for lenders. For private borrowers, the principle of free lending should be adopted, and for commercial borrowers, the system of examination and approval should be adopted. At the same time, it should be stipulated that lenders must be the owners of funds, and the supervision of private lending should be strengthened to standardize its development.

2. China's long-term simple suppression of private lending has made it out of supervision and developed underground, which has caused adverse consequences for China's economic development and social stability. The existence of private lending has its theoretical and practical basis, and legal regulation and government supervision are the solutions. At present, the legal system of non-governmental lending in China is complicated and outdated, and the supervision system also has defects such as lack of subject and too strict. These problems have reduced the positive role of private lending. In the future, we should establish a multi-level and multi-form private financing system, improve the legal regulation of private lending, strengthen government supervision over private lending, and guide and promote the healthy development of private lending.