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Private finance

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Most foreign countries define informal finance as "informal finance", which refers to the financial behaviors that exist outside of the financial activities (formal finance) approved and supervised by the government and drift away from the edge of existing systems and regulations. Private finance is the capital activity of all non-public sectors of the economy to finance the private economy. The main problem with this definition is international integration. According to this definition, private finance plays a dominant role in the financial system of western countries, which is obviously inconsistent with the facts.

Chinese name: Private finance
Foreign name: Informal Finance
Alias: informal finance

Origin: Xia Shang period
Heyday: Ming and Qing Dynasties
Role: Promote currency trading and circulation
Main forms: Rural credit cooperatives, rural cooperative funds

Background

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From the Xia and Shang dynasties more than 2000 BC, to the unification of currency in the Qin Dynasty and then to the flourishing of the Tang Dynasty in China, with the unification of the country and economic development, private finance, mainly in the form of private credit, has become increasingly prosperous. In particular, the private credit business in China reached a climax when it came to the bank note shops in the Ming and Qing dynasties. At that time, there were no official financial institutions, but basically private financial institutions played a role in currency trading and circulation. In rural areas pawnshop The city is dominated by pawnshops, banks and ticket banks.

China's private finance has existed for 4000 years, with a long history and prosperity. In particular, the financial industry of Shanxi in modern times represented the highest level of world finance at that time. In the era dominated by private finance, no major financial risks and financial fraud have occurred, and the order of private finance is generally good.

As the saying goes:“ Jade is uncut and cannot become useful ”。 If jade is not carved, it may be buried in gravel or rubble for a long time, and the sun will not be seen. This is true of natural resources, as well as social resources. Although private finance plays a small role in today's financial resources, it has made great contributions. However, because its flaws are exposed, its quality is introverted, and it has been discriminated against for a long time, it often becomes the target of rectifying the financial order. However, the form of private finance is not limited to allowing private capital to set up banks private lending It is more important to launch the establishment and utilization of private capital Private equity investment funds 、 Venture Capital Fund The unique operation mechanism of such emerging financial instruments may be an effective way to break through private finance!?

Private finance in the form of private credit pawnshops

Private finance in the form of private credit -- bank

Concept Introduction

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Fudan University Professor Zhang Jun (1997) defined private finance as a part of private credit formed spontaneously compared with the official formal financial system and banking organizations. This definition indicates the informality of private finance, but it does not clearly define the meaning of private finance. At the same time, the official is also vague.

Gillis believes that private finance refers to informal financial organizations that are not included in the national financial management system. The definition of private finance in this definition is based on whether it has been incorporated into the national financial management system, which clarifies the non regulatory nature of private finance. However, there are problems in actual operation. Many financial organizations have obtained the approval of local government departments and Administration for Industry and Commerce Registered, but not included in national finance Organization management system It is obviously unreasonable to classify it as private finance under the management of.

On the basis of the above definition, Gao Fa believes that private finance, compared with formal finance, refers to organizations that are not registered in the industry and commerce department and are engaged in financing activities. It mainly includes: private lending , private fund-raising, Underground bank , joint venture, etc.

The People's Bank of China believes that, compared with the financial institutions established with the approval of the state according to law, it generally refers to the value transfer and principal and interest payment between the natural persons of non-financial institutions, enterprises and other economic entities (excluding finance) with monetary capital as the subject.

Private finance is relative to official finance. Official finance is within the scope of the formal financial system, that is, financial activities under the management of China's financial regulatory authorities. Therefore, private finance mainly refers to the banking and insurance system stock market The financing activities undertaken by economic entities other than rural credit cooperatives belong to the category of informal finance (unobserved finance).

Specifically, private finance has the following meanings:

(1) From the perspective of the main body of the transaction, the counterparty of the transaction is basically the economic actor who can not get financing arrangements from the formal financial sector, such as farmers who borrow from each other, and entrepreneurial enterprises who obtain entrepreneurial capital.

(2) The trading partner is a non-standard financial instrument that is not recognized by formal finance.

(3) Formal financial intermediaries have standardized institutions and fixed business premises, and private finance generally does not have these characteristics.

(4) Private finance is generally located in Financial supervision authority Outside the scope of supervision.

Development trend

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Inevitability

In rural development, especially in the development of rural industry, capital has become an important constraint. Farmers often do not get effective financial support when entering non-agricultural industries, especially when small enterprises and family enterprises start or encounter difficulties in capital turnover, which greatly restricts the development of rural economy. There are two ways to solve the problem of insufficient funds in rural areas: one is to strengthen formal financial services, reform existing rural financial institutions, and increase their lending and savings capacity; Another idea is to play the role of private finance to promote orderly private finance financial market Formation of. Rural areas are originally areas where formal financial resources are relatively scarce. With the commercialization reform of the four major banks, many business outlets in rural areas have been withdrawn, formal financial resources are more scarce, and the supply of financial resources is obviously insufficient; However, agriculture, farmers and rural areas often need financial support because of their weak position. This extreme imbalance in supply and demand has given birth to private finance. Private finance first emerged in rural areas and spread rapidly. Effective financial support is indispensable for solving the "three rural issues". Rural private finance It is the spontaneous development and formation of the majority of rural economic entities in order to meet the financing needs, dissociating from the government financial regulation Non official financing activities and organizations other than.

Rural private finance is born in Planned economy towards Market economy system The transitional period of transition is the inevitable outcome of the unbalanced development of economic and financial systems. With the continuous progress of the reform of the rural economic system and the reform of the entire national financial system, rural formal finance is increasingly not adapted to the needs of rural economic development for diversified financial services. Therefore, in the mid and late 1980s, rural informal finance, represented by rural private finance and cooperative foundations, rapidly emerged, It has had a significant impact on the traditional financial system with numerous drawbacks in rural areas. With the establishment of market economy, on the one hand, administrative control economy still exists; On the other hand, purely market forces are growing, and the sharp contradiction between the supply and demand of funds arising from this is bound to be Rural private finance Leave a huge living space. At the present stage, the main incentive for the development and growth of China's rural folk finance is the high-yield oriented supply and huge financing demand, which will inevitably form a market. The rural folk finance in China shows its "Chinese characteristics" because it is in the period of economic system transition. It is more caused by the unclear boundary between the government and the market, the different marketization steps of each component of the economy, and the ideological lag. For a long time, private finance has been basically classified as underground finance in China, and it has been blindly regulated, but its positive and negative aspects have rarely been objectively analyzed, and its survival mechanism and operation mechanism have not been rationally studied. However, the private finance is "rectification" without collapse, and it is often the trend of rectification that shrinks once and again“ a stirring among the dry bones ”, even more prosperous. This shows that private finance has its objectivity. Due to the defects of China's rural financial system, it has lagged behind the development of rural economy. A certain financial "hole" has formed. Although rural folk finance can only exist in the form of "gray" or "black", it is extremely active; Although repeatedly banned or prohibited by the government, it shows tenacious vitality. Rural private finance The existence of, also fully shows that formal financial institutions can not meet farmers' financial (especially loan) service needs, and private finance just makes up for this lack. The development of private finance is the result of the induced institutional change from bottom to top following the market demand, which is undoubtedly a beneficial exploration of the way of financial reform. The vigorous development of folk finance in rural areas has alleviated the contradiction between supply and demand of rural financial resources, narrowed the gap between urban and rural areas in the possession of financial resources, and promoted the economic and social development of rural areas. With the rapid development of rural areas in eastern China, private finance has played a pivotal role. It can be said that private finance has gradually become a rational choice for farmers in financing difficulties.

situation

The survey shows that more than 1/3 of the financing of SMEs in China comes from informal financial channels. Private financing It is mainly manifested in the borrowing between families and individuals such as relatives and friends, lending between enterprises, and private placement of funds. The perspective of private finance is broader, such as private finance Angel investors In fact, they have begun to learn from some operating models in the western market, and their growth and expansion is much faster than we imagined. The report of the Central Bank calculates that the scale of private financing in China is nearly trillion yuan, accounting for about 6% of the total loans. According to our understanding of some private financial institutions, their non-performing loan level is far lower than that of the state-owned banking system, and some have even kept a record of zero non-performing loans. We can even say that active private finance is the best gift given by the market to China's economy.

With those folk financiers timid and overcautious In contrast, some bankers in the banking system are not so rational. They crazy to absorb deposits, crazy to issue loans, crazy to create non-performing loans, and finally crazy Write off of non-performing loans 。 The reason behind this is very simple. They are using other people's money to do other people's things. This is the most inefficient institutional arrangement.

Faced with the same credit environment, the same financial risk tolerance, and the same ups and downs of the market, private finance, although there are also such anomalies as Delong, is significantly better than the overall performance of the state-owned financial system. The reason, of course, is not how much higher the IQ of private financiers than that of state-owned banks, but that the former is really acting in accordance with market rules, while the latter is likely to act in accordance with official rules. From this point alone, private finance should be treated well.

However, after all, the existence of private finance is still a fragile existence lacking the right to speak. Any change in the policy vane may demonize it, or even sweep it out of the door. As most financial decision-makers come from within the state-owned financial system, this tendency cannot be avoided. If there is no spokesperson for private finance at the decision-making level, it will inevitably be equated with underground finance, or even illegal finance. As a result, China's economy will suffer greatly.

operation pattern

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The main form of private finance is that it is directly completed between fund suppliers and demanders or through private Financial intermediaries Debt financing completed indirectly. Main operation modes include:

Rural Credit Cooperatives

Rural credit cooperatives are generally officially defined as cooperative financial organizations. From credit unions Balance Sheet From the perspective of owner's equity, there is no country in the owner's equity, and the paid in capital is composed of the cooperative member's share capital and enterprise's share capital. From this point of view, the property rights of credit cooperatives are clear and belong to the joint ownership of the members and enterprises that have shares. In this sense, credit cooperatives should belong to civil finance. In reality, some credit cooperatives belong to state-owned finance (still controlled by the state), some belong to private finance (actually taken over by the people), and some are between the two. There is no doubt about the basic position and main force role of rural credit cooperatives in rural financial practice. For a period of time, there has been a great debate about whether it can really become an institution that conforms to the internationally accepted cooperative financial principles. For a long time, China's rural credit cooperatives have been close to collective ownership and state-owned ownership since their inception. The awareness and performance of "official" is very strong, and they are responsible for shareholders. The nature of their cooperative finance funds and financial services of "voluntary, mutual assistance, mutual benefit, democracy and low profitability" is not much reflected. The cooperative members not only cannot enjoy the priority and preferential rights of loans, as well as the right to share dividends, but also accept loans much higher than the benchmark interest rate; The democratic management system such as the membership meeting, the board of directors and the board of supervisors can not play its due role at all. The cadre is appointed rather than elected. Therefore, it lost the trust and support of the countryside. The practice of cooperative finance in China has always been linked with rural credit cooperatives. Although many reforms have been carried out, "rural credit cooperatives have never really become cooperative financial organizations, which has caused people to doubt the basis of the existence of cooperative finance. It should be noted that in China, Rural credit cooperatives There are objective reasons for always deviating from the principle of cooperative system: government intervention, legislative gaps, property rights system defects, heavy historical burdens, etc.

Rural cooperation fund

Rural Credit Cooperatives

Rural cooperative fund is a new type at the earliest Social security organizations , later evolved into Rural Cooperation Foundation 。 The rural cooperative foundation is a cooperative system Collective economic organizations In nature, the rural cooperative foundation is not a real financial institution, but a supplementary form of the community financial system. In 1983, in order to effectively manage, use and rectify the collective accumulated funds, some villages managed the collective funds by villages or townships and set up foundations for paid use; 1984-1986 was in the germination stage; From 1987 to 1991, it was in the experimental stage of reform, and gradually received encouragement and support from the government and relevant departments; Since 1992, it has been in the stage of promotion and steady development. Before 1995, with the approval of the local agricultural administrative department, rural cooperative foundations have been established in rural areas all over the country, including district level, township level and village level.

The fund raising channels of the Foundation mainly include:

(1) Collectively accumulated funds, that is, the funds collected from farmers are withdrawn as a whole. Such as water conservancy cost Land use fee , highway maintenance fees, military subordination of households with five guarantees, militia training fees, cultural, educational, health, science and technology service fees, etc.

(2) Agricultural development funds: funds allocated or donated by the superior to support agricultural construction.

(3) Capital invested by farmers.

(4) Escrow funds: funds, fines or revenues allocated by the government to township (town) institutions.

The funds are mainly used for township (town) and village run enterprises, agricultural infrastructure, farmers' planting and breeding industry, and farmers' living difficulties relief. The existence of rural foundations has alleviated the contradiction of insufficient fund supply under the formal financial system arrangement to a certain extent, which is conducive to the development of rural economy. However, the operation of most rural foundations has violated the mutual aid purpose of cooperative foundations, turning rural foundations into the second rural credit cooperatives to handle deposit and loan business. Due to the widespread high interest deposit taking and internal management confusion, The rural foundation soon appeared a large area of cashing risk. Rural Reform Pilot Area Office of the Ministry of Agriculture“ Rural cooperative finance ”The research group found in the national survey that most of the rural legal foundations of the group have not been registered in the local industrial and commercial departments, nor have they obtained the corresponding business license, and their legal person status has not been recognized by the law (some places regard them as natural legal persons in dealing with legal issues). According to the General Principles of the Civil Law, the cooperative fund has basically met the conditions for obtaining legal person status. If the status of legal person is not established, its economic behavior will inevitably be restricted. It can neither pay taxes according to regulations nor be protected by law. In January 1999, in order to standardize the financial market and rectify the financial order, the State Council issued No. 3 Document, officially announcing the nationwide unified ban Rural Cooperation Foundation 。 In some areas, there are still very few rural cooperative foundation organizations, but the mode of operation has changed from public to underground. In this regard, its sum Underground bank In fact, there is no big difference. Although this form of rural cooperative foundation no longer exists, we can still learn from its advantages and discard its disadvantages by analyzing it. At the historical stage of its existence, on the one hand, the rural cooperative foundation has filled the gap in the rural financial system at the grass-roots level. Its business is mainly for small farmers to engage in uneconomical microfinance services, which can make up for the shortcomings of the bank with flexible financial activities; On the other hand, from the practical experience in recent years, only in those places where rural cooperative foundations have developed well, Usury Can be suppressed. However, in the process of its development, the government has carried out too much administrative intervention on it, and due to the lack of a perfect regulatory mechanism, many cases of relying on relationships and going through the back door have occurred, and the functions of rural cooperative foundations have been seriously distorted. The rural cooperative foundation is a large private financial institution that has completed the whole process of its emergence, development and demise. Its analysis can give us many experiences and lessons. An outstanding lesson is that if financial supervision has not been carried out in accordance with the rules of the market economy, the government can also instruct private financial institutions. The legalization of private finance is a disaster of private finance.

mutual-loan club

Syndicate is the general name of various financial associations. This is a folk financial form with a long history in China. It is a spontaneous mass financing organization with interaction and cooperation based on blood and geographical relationship. It is called "revolving fund" in foreign countries, including revolving fund, standard fund and swing fund in China. Although there are a variety of names and specific practices, they are essentially interest bearing loans between members of the membership. This is a popular form of mutual financing among the people, integrating savings and credit. Generally, it is composed of several members who mutually agree to hold a meeting every other period of time. Each time, a certain amount of funds will be gathered and handed over to one member in turn. Basically, it is not for profit. Among them, those who fix the use order in advance are called "round meetings", those who determine the use order by drawing lots are called "swing meetings", and those who decide the use order by bidding are called "bid meetings". These associations are generally linked by geography, people and blood, and are underground. Although there are many names of the association, they all follow a set of simple rules: a natural person, as the leader of the association, organizes a limited number of people for certain purposes (such as children getting married and going to school, building a house, buying production materials, etc.), and each person will pay the agreed amount of money every term (every month, every month, every quarter, every half a year, every year, etc.), Each period, one person can get all the current funds (including the interest paid by other members) together, and pay the corresponding interest in installments. Who receives the money in which period shall be determined by drawing lots or bidding for interest. In China, as far as the scale is concerned, most of the federations with large amount of financing are located in the economically developed southeast coastal areas, especially in Zhejiang and Fujian. Joint venture is a common form of rural financial operation. It is suitable for a society of acquaintances with weak mobility. It relies on informal social relations, trust relations, and informal sanctions institutions, such as social exclusion. In general, members do not choose to resort to law, but to exclude members who violate the repayment provisions of the association. Only after the large-scale "falling meeting" phenomenon appeared did farmers have to resort to the law.

private lending

Cartoons related to private lending

private lending There is a difference between the broad sense and the narrow sense. The broad sense of private lending is the general term of all kinds of private finance. The narrow sense of private lending refers to the lending activities between private individuals. Generally, private financial activities are unorganized financial activities. According to the interest rate, there are three forms of private lending: friendship lending (white lending), gray lending (medium interest rate lending) and black lending (usury). In the narrow sense, private lending is generally scattered and hidden, with different interest rates, non-standard forms of borrowing, and difficult management, among which black lending is risky. The forms of rural private lending generally include the following situations: First, oral agreement. This situation is mostly carried out between relatives, friends, fellow villagers, colleagues, neighbors and other acquaintances, who rely entirely on personal feelings and credit, without any procedures, and generally the amount is small; And the two sides have close relations; The second is the simple performance type, which is a common form of lending. Most transactions can be made only by a single IOU or an intermediary - generally the amount is not too small or the relationship between the two parties is not very close; The loan term may be long or short, and the loan interest rate may be high or low, depending on the depth of the relationship between the two parties; The third is usury. Some rich farmers lend their funds to farmers or enterprises in urgent need of funds at a higher interest rate than the bank, so as to obtain high returns. The fund raising of private lending is multifaceted. Generally speaking, a private lender has a balance, and the lender has a good reputation. If relatives, friends or others put their money here, they can obtain interest income higher than the bank deposit interest. The lender lent the money and got the interest margin. These private lenders have a semi institutional feature. The credit of private lending institutions is very good, and a large area of them will be an exception. Many private finance needs a trust mechanism. Everyone is familiar with each other and trust each other. It is an acquaintance society with poor liquidity. If there is a problem, there is an informal sanctions mechanism, that is, the so-called social exclusion, and no one pays attention to you. This feeling is very uncomfortable. In rural areas, private borrowers are farmers, who have a lot of private loans. A large number of financial needs of farmers, including some non-financial needs (such as serious illness is originally a social security need), also need to be solved through finance, because farmers have no other source of funds. For example, major events such as illness, marriage, and building a house all require loans, including loans from relatives and friends, as well as private loans. There are also some small production, such as purchasing production tools. along with National macro-control With the impact of interest rate policy adjustment, the private lending market has become more active. Private lending, an ancient form of direct financing, still has a huge market in rural areas of China. Especially in Hubei, Jiangxi and other provinces with prominent "three rural" problems and Zhejiang, Jiangsu and other regions with relatively developed private economy, affected by tax reform, financial reform, macro-control and other factors, the once relaxed private lending has become active again, and the scale is huge.

Private bank

Private banks are financial institutions like banks that have not been approved and set up to issue loans in the form of deposit taking. Private banks are divided into two categories: one is mainly involved in the operation of private banks or dens engaged in foreign exchange trading business; The second involves "illegal fund-raising" or "usury". People's Bank of China On January 31, 2002, the Notice on Banning Underground Banks and Cracking Down on Usury was issued, specifically referring to the active private credit activities in some rural areas, the prominent phenomenon of usury lending, and even the emergence of private banks specializing in usury lending activities. Private banks engaged in financing and high interest lending began to be active in the 1980s, and their development turned in the late 1990s. Issued by the State Council on July 13, 1998《 Measures for the Suppression of Illegal Financial Institutions and Illegal Financial Business Activities 》A series of institutions were declared to be illegal financial institutions, and private banks gradually became underground. In the economic and financial activities of Wenzhou and other places, private banks even occupy a very important position. In the 1980s, there were underground banks in Wenzhou. The founder of the first Fangxing Bank that was publicly unveiled was called Fang Peilin , in Wenzhou Cangnan County , very famous. Fangxing Bank was opened in 1984 and allowed by the local government. The operation efficiency of Fangxing Bank is very high, and the interest rate is market-oriented. Sometimes 10000 yuan can be transferred three times a day, and one transfer is an interest income, so the income is very high. Fang is an ordinary local people who still live there. Later, the branches of state-owned commercial banks operating locally first jumped out of opposition, and the Central Bank also sent people to investigate, saying it was illegal. They were forced to operate underground for several years, and finally stopped. This was also the case in the 1980s. What is interesting is that, considering the local influence of Fangxing Bank, if it is forced to ban it, it will definitely cause loss to customers and social chaos. So the People's Bank of China allowed Qianku Town Our banks and credit cooperatives have also implemented interest rate floating, which has changed the previous service mode and become the pilot area approved by the head office of the People's Bank of China to take the lead in carrying out interest rate reform in the country, in order to compete with Fangxing Bank and squeeze out banks. It was in this competitive environment that Fangxing Bank officially closed in 1989. Later, other similar private banks were banned in the name of illegal financial institutions.

Private fund-raising

Private fund-raising was popular in the 1980s, which to a certain extent met the requirements of the then Non-public economy In particular, the demand for funds at the initial stage of the private economy has played an important role in the rise and rapid development of the private economy. Large scale fund raising, especially large-scale public funds, is not protected by law without approval. In rural areas, a small number of large households, specialized households and township enterprises with a certain scale are likely to have a need for large-scale funds, which may lead to private fund-raising. Fund raising includes productive fund raising, public welfare fund raising, mutual aid and cooperation welfare fund raising, specifically including labor led fund raising, human share investment, special fund raising, joint venture fund raising and temporary fund raising. However, due to the high risk and the disturbance of rural financial order, it is generally restrained, such as Hebei Province Sun Dawu Fund raising plan. The innovation of the form of private fund-raising is mixed with the indifference to risks and fraud, which sometimes causes social shocks in some areas. It was combined with the strengthened regulatory awareness after the Asian financial crisis in 1997 to stimulate the government to strengthen its efforts to control illegal fund-raising. In April 1998, the State Council promulgated the Measures for the Suppression of Illegal Financial Institutions and Illegal Financial Business Activities, which put forward the concept of "absorbing public deposits in disguised form", and set up the bottom line clause of "illegal fund-raising to unspecified objects of society in any name without legal approval", which greatly expanded the scope of authority of the regulatory authorities, It has increased more flexibility for its supervision and law enforcement behavior, and returned some innovation of fund-raising forms wandering between the power boundaries of different regulatory authorities to the regulatory framework.

Microcredit

Micro credit activities centered on rural poverty alleviation have not been included in the supervision of the People's Bank of China. Some are quasi formal finance, some are informal finance, and some are an innovative financial tool of formal financial institutions. In order to solve the poverty problem of the population in China's backward areas and make up for the defects of poverty alleviation policies, China has introduced and implemented the rural micro credit poverty alleviation model since the early 1980s. China's rural microfinance has learned from Grameen Bank of Bangladesh In terms of operation, it adopts the three-tier integrated operation mode of "government ten banks+poverty alleviation cooperatives". The government's direct and active participation is a prominent feature of rural microfinance in China. Compared with the rural financial market and the credit poverty alleviation policy, China's rural microfinance adheres to the basic system of group credit, zero repayment of whole loans, small continuous loans and provision of technical services, implements the principle of "paid use, small short-term, zero repayment of whole loans, group joint guarantee and rolling development", and guides and helps poor farmers to develop production, increase income and get rid of poverty, To achieve sustainable economic development. In order to effectively achieve the above objectives, a set of strict organization, management rules and regulations, and procedures have been developed and developed, and a well-trained and voluntary working team committed to microfinance has been established. China's rural microfinance can be divided into five categories: the first category is project microfinance, which has a project deadline. Many of the microfinance projects are supported by international or foreign institutions and are financial activities outside the supervision field of the People's Bank of China; The second category belongs to micro credit poverty alleviation projects implemented by the government, namely, poverty alleviation discount loans. The third category is Non governmental organizations Professional microfinance; The fourth category is the micro credit business operated by formal financial institutions, which is required by the government to be issued by rural credit cooperatives and agricultural banks to farmers and rural micro enterprises Micro credit loan Or group co guaranteed loan, which is a financial instrument of formal financial institutions; The fifth category is as follows Mao Yushi Shanxi founded by Linxian County "Longshuitou Villagers Mutual Aid Foundation" is a pilot project. Microfinance has developed rapidly in China, and 10 provinces and autonomous regions have invested hundreds of millions of yuan in poverty alleviation in this way, which has made amazing achievements. There is no doubt that microfinance has made great achievements in China's poverty alleviation and development projects, but there are also some inherent shortcomings and limitations, which are mainly reflected in that microfinance only solves the problem of providing microfinance services to poor farmers, but it cannot cover the poorest, non income generating or weak income generating poor households in rural areas; Micro credit institutions can only provide technical services and training to their borrowers; Since the funds available for microcredit are limited after all and are not allowed to exceed the maximum lending limit, microcredit itself is difficult to produce scale effect; The survival and sustainable development of microfinance should not only maintain the value of capital, but also increase the value of capital. Some technical problems need to be solved. Despite many problems, microfinance is still a revolutionary policy change from relief poverty alleviation to development poverty alleviation in micro financial services“ National August 7th Poverty Alleviation Plan ”One of the major strategic measures of the common prosperity The important way. Micro credit has been proved to be an effective poverty alleviation model by practice. Its scientific operation mode and strict management system ensure that micro credit can achieve a high repayment rate. The main role of microcredit is to provide credit services for the rural poor, which is a necessary complement to the current imperfect rural financial system. Its important role in achieving poverty alleviation goals in different regions is difficult to replace by other rural formal and informal finance.

Private placement advantages

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Although China has no concept of private placement and corresponding laws and regulations, private placement capital exists objectively in China. Private finance in China has always been active. According to the international definition of private placement, many private financial activities in China can be included in the scope of private placement, but private placement in China is more irregular, more difficult to supervise, with great risks, and is easy to become a fraud tool.

Private placement classification

Private placement in China can be roughly divided into several types:

Private development raising

For example, the popular manor development investment in Guangdong a few years ago is a kind of private placement (the United States has also been popular with orchard development investment). At present, some "tomb reservation investment" for the wealthy elderly population is also private placement, and more of them are real and fake ones who raise funds for the development of new products and projects. An open case is Hainan Sanya Development and Construction Corporation "Sanya Real Estate Investment Bonds" issued in 1992. Some researchers defined this issue as“ Asset securitization ”(He Xiaofeng, Liu Yongqiang, 1999) is not exact. This is a typical private placement, but the scope of private placement has become public (the public placement of private placement is very common in China, which is also an important reason for some private placements to cause social harm).

Raising with membership

Including some bid fairs and mouse fairs. Membership recruitment is generally considered as a kind of private lending However, the author believes that a considerable part of it belongs to the scope of private placement, because the membership based collection is close to investment funds. The common point of this kind of fundraising is that the return rate is very high, sometimes too high to be realized and designed as a serial set, which is obviously fraudulent and gambling.

Operation fund raising and employee stock ownership plan

Some enterprises (especially small enterprises) promote the production, operation and capital raising and Employee stock ownership plan This kind of fundraising may not be large in number, but it is still private placement in essence. Private placement in China can be said to be a mixture of good and bad, which is not only beneficial to economic development, but also fraudulent. Due to the lack of supervision, many fundraising activities that should have been private placement went far beyond the scope and became disguised public offerings, expanding risks and causing social problems.

Although private placement in China dragons and fishes jumbled together However, healthy and legitimate private placement has played and is playing a positive role in China's economic development. In the 1980s, the rise of township enterprises in Jiangsu was to a large extent a success of capital mobilization. At that time, due to the strong planning color of formal finance, the mobilization of capital by the grass-roots government achieved the development of township enterprises outside the planned economy system. There are not many township enterprises in Wenzhou, Zhejiang, but the economy has also developed rapidly, and its capital mobilization mode is more market-oriented private lending And private placement, private lending and private placement have contributed to the development of Wenzhou family enterprises. The difference of capital soil between Zhejiang and Jiangsu makes them have different ways of capital mobilization and different enterprise models. Zhejiang's informal finance is more active than Jiangsu's; The development of Guangdong has benefited from foreign investment, but the role of private placement cannot be ignored.

It is conducive to industrialization

The low industrialization rate of high growth projects is a major problem in China, and one of the important constraints is the difficulty in financing. On the one hand, high growth projects have greater uncertainty, on the other hand, there is greater information asymmetry between achievement owners and investors, which makes it difficult for high growth projects to obtain funds from formal and traditional financial sectors. At this time, private placement can play a great role. Private placement can not only break through the restrictions of formal finance on the credit record, scale, profitability, guarantee and other aspects of financiers, but also attract investors and compensate investment risks with flexible terms (including high interest rates), so it can become a good way of financing high-tech industrialization. Many high growth enterprises in the United States are financed by private placement when they start up.

Beneficial to the development of private enterprises

Private placement is conducive to the development of private enterprises, especially in the central and western regions where formal financial strength is weak. It is difficult for private enterprises in China to obtain funds from formal finance. This situation cannot be reversed in a relatively short period of time. Even in countries with extremely developed financial markets, small enterprises are also difficult to benefit from formal finance. The proper development of private capital market can play a role in promoting this.

Facilitate flexible fundraising

Some enterprises in China have raised emergency funds from employees for production and operation. These enterprises may have a high debt ratio, banks are unwilling to lend, and no other enterprises are willing to guarantee. However, enterprise leaders may "disclose" to employees, and employees know that the funds collected can indeed bring profits and guaranteed returns, Therefore, private placement can eliminate the information asymmetry between investors and fund raisers in some cases.

Beneficial to enterprise restructuring

Many state-owned enterprises and Restructuring of collective enterprises One of the important ways is to implement employee stock ownership or backbone stock ownership. In practice, this reform method does not completely distribute the stock assets to individuals, but dilutes the stock assets through incremental fundraising, so it also involves private placement. Our country usually ascribes this kind of situation to going to the fundraising, which is not accurate in fact. More importantly, there is no appropriate going to fundraising law to regulate this behavior, so it is easy to cause conflicts, disputes, and even fraud. On the one hand, we should allow the reform of this way; on the other hand, defining this kind of raising as private placement is conducive to limiting it to a certain range through legal means and preventing social problems such as disputes and fraud.

Encourage and guide private placement

In fact, private equity in China is underground and semi underground. Healthy private equity cannot be encouraged and guided, and fraudulent private equity cannot be prohibited. Since there is no concept of private placement in our official legal documents, and our country has not systematically considered the positive role of private placement, plus our concern about the risk and fraud of private financial activities, private placement is actually suppressed. Taking some measures to moderately develop China's private equity market is worthy of serious consideration.

First, make private placement a formal legal concept and define its scope. Private placement is a concept corresponding to public offering. Only by defining which offering behaviors can be exempted from review in the relevant securities laws, and in what way and within what scope can these exempted offering behaviors be conducted, can private placement be legally binding.

Secondly, it is allowed to set up a limited liability company by private placement. In the United States, in principle, one person can set up a limited liability company for one dollar. In China, the establishment of joint stock limited companies is very strict. The relevant laws stipulate the minimum amount of registered capital of joint stock limited companies. They stipulate that when a natural person establishes a joint stock limited company by means of promotion, the number of promoters must be more than five. When a joint stock limited company is established by means of raising, it must be publicly raised, which increases the difficulty of establishing a joint stock limited company. If the legal status of private placement can be established, it is acceptable to establish a joint stock limited company by private placement, or to initiate the establishment of a private placement after the establishment of less than five people, which is very beneficial to the establishment and development of small companies.

Third, develop institutional investors and appropriately develop specialized Private investment fund 。 The risk of private equity is high, so the objects to be raised can only be those with risk judgment ability and Risk tolerance Investors. Such investors certainly include wealthy families and individuals, but most of them are institutional investors, such as pension funds, endowment funds, insurance companies, investment companies of large enterprises, etc. For the private equity market, families with more surplus funds are also potential investors, but to attract these funds and control risks, a better way is to develop professional private equity investment funds. Specialized investment funds are not only conducive to supervision, but also can intervene in the governance of funded enterprises, and can more effectively control investment risks.

In a legal society like the United States, the way to control risks and prevent fraud not only limits the scope of private placement, but also relies heavily on the information disclosure and Parties Litigation of insufficient disclosure to the offeror. Many private financial activities seem to be that people do not sue and officials do not investigate, but in fact people like to sue, so fraud activities are intimidated by the power of litigation and there is no big market, and the recovery of losses incurred by the parties is only within the scope of the law. However, the situation in China is different. In case of fraudulent fundraising, no one may sue, and they will actively participate. Once losses are incurred, the parties may require the "government" to bear the responsibility, and even the normal risk investment losses also require the government to compensate. However, some high interest fund-raising is fraudulently and gambled. Investors should invest and introduce others to invest even though they know that it is impossible to have such high returns, that the promise of the fundraiser is false, and that the disclosure is misleading. Therefore, in order to effectively prevent risks and fraud in China, we must mainly focus on the ex ante restrictions on the scope of private placement, rather than relying too much on the disclosure doctrine in the securities theory and post-mortem investigation based on false disclosure, as in the United States. In addition, we often judge whether it is illegal to raise funds and whether it should be prohibited according to the level of the return rate. In fact, this will not only inhibit legitimate private placement, but also cannot prevent fraud. Like fraudulent fundraising, legitimate private placement usually attracts investors with high returns. Because private placement is often high-risk investment, we cannot arbitrarily say that the annual return rate is impossible, so it must be fraud. The real fraudster can cheat even if he raises money at a 10% return rate. Therefore, the control of private placement risk and the prevention of fraud should not be judged by simple standards, but should have a set of legal norms. First, the scope of securities must be defined as comprehensively as possible. Second, limit the way of raising. Third, restrictions should be placed on the objects, number of people and amount of money raised. Fourth, limit liquidity.

In short, private equity market and private financial market have strong overlap. How to launch the establishment and utilization of private capital Private equity investment funds 、 Venture Capital Fund The unique operation mechanism of such emerging financial instruments may be an effective way to break through private finance!?

The road to development

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China's private finance mainly originated in rural areas, especially in coastal areas, such as Zhejiang, Fujian, Guangdong, etc. Since 1986, rural areas private lending The scale has exceeded the scale of formal credit, and is growing at a rate of 19% every year. In the relatively developed southeast coastal areas, there are a large number of direct temporary capital loans between enterprises, especially private enterprises, or private loans with a fixed interest rate higher than the bank. It is estimated that the amount of direct loans or loans between enterprises reached 80 billion to 100 billion yuan in 2000 alone. However, compared with the huge scale of private capital, the scale of private finance in China is not large. According to relevant estimates, the total amount of private finance in China is about 300 billion yuan, accounting for 0.3% of the national total. This also shows that China's private capital has great potential, Private financing The enthusiasm of private capital has not been fully mobilized. Although there are no laws and regulations restricting private capital from entering the banking industry Private banks So far, there is only one Minsheng Bank. Other capital entering the banking industry is in the form of equity participation. The other 10 and 112 of the 11 joint-stock banks City Commercial Bank None of them are held by private capital. Our country is currently Xu Dianqing The pilot research work of five private banks organized by the professor (the five private banks are Shenyang Ruifeng Bank, Guangdong Nanhua Bank, Shenzhen Minhua Bank, Jiangsu Sunan Bank, Xi'an Great Wall Bank, and the enterprises involved in the pilot include Dongyu Group, Shenda Group Fengjia Group, Zhigao Air Conditioning Company, Zhongkezhi Guarantee Company, etc.), which has been carried out for several years, has aroused widespread concern from all walks of life, but so far none has been approved by the regulatory authority. Therefore, private capital is still in a marginal position in the financial field.

Investment mode

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Private capital has become the third force besides state-owned capital and transnational capital in China. China's private capital contains huge energy. The total amount of private finance is 300 billion yuan, compared with 8 trillion yuan Resident savings deposits Compared with 12 trillion yuan of private capital, the existing capital market is far from fully activating private capital. Our task is to find a variety of investment methods for private capital. The main approaches are:

1. Public legalization of private financial institutions

First, private financial forms such as various foundations, private banks, and enterprise fund raising have obtained legal forms, and banking regulators have strengthened supervision over them. For some of them Registered capital Private banks and other "illegal" financial institutions that can operate in accordance with the law and have a high compliance rate should be allowed to become legal private financial institutions within a certain period of time, and their management and supervision should be strengthened. Second, encourage private funds to enter formal financial institutions. Private capital can be used for reference when entering formal financial institutions City Commercial Bank Let private investors join the local market in the form of share cooperation Small and medium-sized financial institutions , establish a local joint-stock cooperative bank; It can also carry out shareholding system Joint stock cooperative system Reconstruction can be established where conditions permit Rural Cooperative Bank or Rural Commercial Bank And create conditions for rural financial institutions to absorb social capital more widely and enhance service functions. Wuxi, Jiangsu Jiangyin 、 Zhangjiagang Rural credit cooperatives in three cities have set up rural commercial banks, opening a way for private capital to enter the financial industry. Joint stock system and joint-stock cooperative system established by private capital Private banks As a form of incremental reform, the joint-stock and joint-stock cooperative private banks have a great impact on our development socialist market economy It is very necessary. Because without the emergence of private banks outside the system, the state-owned banks within the system will have no competitors, and there is no way to solve the problems within the system. Just as the problems of state-owned enterprises should be solved by developing private enterprises, the development of private banks is also a means to solve the problems of state-owned banks. Now the question is not whether to develop private banks, but how to choose the right time, place, scale and how to strengthen the supervision of private banks.

2. Development Fund

China's banking system has concentrated huge personal wealth, and a large number of deposit balances have become the tiger in the dragon. Some places have made some useful attempts to make full use of these private capital to invest in economic construction. For example, in Shanghai, through trust funds, private capital (personal savings deposits) purchases funds, invests in infrastructure construction, and private capital enters the original state-owned economic field, which not only realizes the ownership structure adjustment, but also realizes the reform of financing methods, killing two birds with one stone. Therefore, we should give more control to the management of state-owned enterprises Non-public enterprise To provide a more relaxed environment for non-public enterprises and more financing methods, such as investment funds and trust funds, residents will purchase investment funds and trust funds from their savings, guide private capital to flow to the original state-owned sector through market operation, and realize the transformation of the state-owned sector's equity structure and operating mechanism. This can improve the operating efficiency of the original state-owned sector, which is in line with China's Market economy system The direction of reform.

3. Issuance of corporate bonds

Compared with equity financing, bond financing has its advantages, because equity involves dividends, while bonds only need to repay the principal and interest. If they operate well, bond issuers can have higher return on capital. Enterprises with real benefits prefer to issue bonds for financing, leaving profits in their own enterprises rather than dividends, so as to encourage corporate bond financing, which will completely change the situation of hot stock market and cold debt market, and also fundamentally improve the structure of China's capital market.

4. Develop the third board market

China has established the main board market and the second board market, and the third board market has begun to take shape. Formed in the period of economic transition Property rights trading market And the over-the-counter securities market is the embryonic form of the third board market in China. The goal of the third board market is to make up for the inadequacy of the main board market and the second board market in the full and effective allocation of private capital. The main goal of the third board market is to maximize the value-added ability of private capital and promote the flow of corporate equity. Therefore, in the case that private enterprises in China cannot enter the main board market and the second board market, developing the third board market as soon as possible and guiding more private funds to enter the third board market and flow to private enterprises is an effective way to promote the balance of capital supply and demand.

System guarantee

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At present, China's private finance is in a state of disorder. Therefore, guiding the flow of private funds, realizing the regularization and legalization of private finance, and developing private finance need to establish a set of strict systems as a guarantee. It is necessary to establish a normal entry and exit mechanism and a strict supervision system for private financial organizations as soon as possible.

deposit insurance system

Whether private lending , various bid clubs, private banks, or Private banks All of them need a certain security mechanism to protect the interests of depositors. This mechanism is deposit insurance system 。 Some people worry that the implementation of the deposit insurance system will cause moral hazard in private banks, and even the well run banks will pay for the poorly run banks. In fact, such problems can be solved by scientific system design. But if there is no deposit insurance system, the interests of depositors cannot be guaranteed, and private finance cannot develop. The purpose of the deposit insurance system is to ensure the interests of depositors, not to ensure that every financial institution participating in the insurance can be fully compensated. Therefore, once a financial institution has an operation crisis due to subjective reasons, the insurance institution has the right to require it to withdraw from the deposit insurance system or be taken over or merged by other financial institutions, so as to minimize the risk caused by poor bank operation.

Security system

In China, the interest rate has not yet been fully marketized, and only rural areas have begun to pilot. Therefore, banks are still willing to lend to state-owned enterprises rather than private enterprises. On the one hand, we should create conditions as soon as possible, realize the marketization of interest rates, let the price of funds adjust the flow of funds, and achieve the balance between supply and demand of funds; On the other hand, the government should encourage, support and standardize the development of private guarantee companies to better serve the financing of private enterprises. To establish guarantee companies and support the development of small and medium-sized enterprises, the government should make full use of and integrate existing resources, rather than collapse or crowd out private guarantee companies from the market. Compared with the huge capital demand of private enterprises, guarantee companies are not many, but few. As a system guarantee of private finance, they should be encouraged and supported.

bankruptcy liquidation

China has not yet established a unified and perfect bankruptcy liquidation system, and the interests of banks as creditors are not guaranteed, which is mainly reflected in three aspects: first, state-owned enterprises adapt to the bankruptcy law, Non-state-owned enterprise Adapt to the Civil Procedure Law. Second, bankruptcy liquidation requires active application. Therefore, it is impossible to enter the bankruptcy liquidation procedure without the application of the debtor and creditors, which provides convenience for bankrupt enterprises to evade debts. Third, some debtors can not make the bank's creditor's rights be fairly compensated by early repayment. When the debtor does not apply for bankruptcy and the enterprise is not low in debt, some creditors who have received the information take legal means to obtain claims and get paid in advance, while the bank's claims often start to be paid after entering bankruptcy proceedings, causing serious losses. It is necessary to establish legal entity enterprises Individual and private enterprises The bankruptcy system of partnership enterprises and natural persons should be improved.

Credit investigation system

The credit system is an important system to ensure the normal operation of the financial system. The establishment of the credit system is an important institutional guarantee for financial institutions to reduce risks and for private capital to enter the formal financing system. The financial supervision department of our country should establish a system that includes enterprise legal person Individual businesses , private enterprises, partnership enterprises and natural persons. Provide customers with blacklists with bad credit records at any time to ensure the interests of relevant parties in financial transactions.

Market access system

The financial industry is a high-risk industry, so there must be strict regulations on the entrants, such as the registered capital, business site, business scope, etc. In addition, in the process of regularization of the original private financial institutions, whether they operated in compliance with the law and whether they did harm to the interests of depositors in the past are important conditions for whether they can enter the financial industry. Therefore, the establishment of financial industry Market access system It is very necessary.

Disciplinary system

about Private financial institutions The risk not only comes from the borrower, but also from the institution itself. How to prevent the moral hazard of bank operators is a problem that must be solved in the development of private finance. Therefore, we must establish a disciplinary system for banking operators to strengthen their sense of responsibility, ensure their legitimate operation and take the initiative to prevent financial risks.

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