Causes of private lending risks

1 plate collisions, economic development and social transformation

in the context of time-space compression and society in transition, the sharp increase in demand for funds for economic development. From a natural person to a legal entity in the course of economic activities, social trust also trust in acquaintances stage, the whole society trust system has not been established. Therefore, private lending risk is the product of the collision between economic development and social transformation.

2, strong Government controls thinking and the weak ability to let the results

of strong Government model is one of the expressions of state capitalism, including interest rates, combating illegal financial institutions. A lot of things, actually the Government incapable of managing, unsupervised. Ban illegal financial institutions and illegal financial activities approach exists in name only, requirement. Control of interest rates, the credit structure, needs money to borrow money, not bad money can get money cheaper, while small and medium enterprises struggling on the edge of bankruptcy, on the other hand Central State-owned enterprises led a life of luxury. Negative interest rates make deposits moved into the shadow banks, trust companies, through the form of high interest rates to lend, which carries enormous risk, a link without liquidity, entire buildings to collapse.

3, and integrity culture of decay and credit system of absence

people and no letter not know its can, ancient acquaintances trust is has restricted force of; and as the front by said, civil borrowing of development are by acquaintances social steering strange of social, in into strange of social Shi, credit system need reconstruction; addition, in traditional integrity culture decay of process in the, new of credit system is also no established up.

4, and civil borrowing contract not specification, and trading no evidence

large civil borrowing participation people stay in acquaintances trust culture, borrowing relationship only with article, and receipt,; but IOU, and receipt, and IOUs, not is equal to specification of borrowing contract; also has part signed borrowing contract of participation people, its contract content not full, and agreed not clear; even also has participation people even signed has written contract, but also not note save related trading evidence.

5, the transaction involved in the asymmetry of information between the parties

private lending has decentralized, spontaneous, concealment, supply and demand information is asymmetric information and interest rates. Past, many residents and business folk debit and credit transaction needs, but need to pay transaction costs could not be known. Due to the credit system, the credit system is not perfect, increased social mobility, both parties understand each other's difficulties.

6, private lending risk management and support system lags behind

financial activities of the business risk is the essence of, modern financial system depends on the risk control system of support. On one hand, personal loan without risk control and control means, on the personal credit information, warranties, payment, notary, legal advice and other support systems needed to be created; in addition, the security companies are reluctant to provide guarantees for micro-credit companies business, some local credit system is not open to the small loan companies and other factors also increase the difficulty of control lending risks.

7, monitoring and early-warning mechanism is not perfect

in a sense, monitoring and disclosure of private lending interest rate, is to establish and improve the monitoring of private lending system and important approach to early warning, macro-control and contribute to the Government's economic decisions to provide more comprehensive information and also helps to provide more comprehensive information for private lending both supply and demand. Wenzhou, Guangzhou attempts to establish a monitoring system, compilation and publication of core interest rate index.   Small loan company submitted data to the Finance Office and people's Bank, but the lack of electronic submission system and lack of analysis and monitoring.

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