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Borrowing status

private lending plays a catalytic role in the development of SMEs, especially in their start-up and early stages of development, does not have the conditions of loans from financial institutions, unable to get financial institutions financial support cases, gets funds from lending this way is particularly important. It was reported in June 2011, people's Bank of China to start financing status of private research findings show, the country's total private financing of about 3.38 trillion yuan, its size is equivalent to 7% of the total bank loans, thus lending enormous funds are a force to be reckoned with financial strength.

(a) the supply and demand determines the existence of private lending. First, as China's economic development, improving people's living standards, accumulation of idle funds in the hands of residents increased significantly. A case study of Acheng district of Harbin September 2012 the end of urban and rural residents ' savings deposit balance was 10,412,730,000 yuan, 1,230,690,000 over the year, an increase of 13.4%. Second, private lending interest rate is higher than the interest rates of financial institutions 60%-200%, high interest rates led to higher interest returns, have high appeal. The adjustment of monetary policy in third countries, in particular small enterprises and individual and private economy in financial institution financing problem cannot be satisfactorily resolved cases, in a relatively civil capital active for some time. Four loans from financial institutions to invest in major projects, effects of transferred deposits of financial institutions at the county level in key industries. A case study of Acheng district of Harbin, in late September 2012 14,734,180,000 deposits of financial institutions within its jurisdiction, 6,541,390,000 yuan of loans, loan to deposit ratio of only 44.4%. Individual bank loan to deposit ratio of only 14.59%, on most of its deposits to its parent bank, money blood severely, restricting the development of County economy, leading to development of private lending.

(b) the convenient flexibility of private lending has great appeal. Simple, flexible term is the causes of the borrowing may be long, private lending occurred mainly in the context of a specific, simple promissory note to complete the funds transfer of the right, the term flexible days, months an open-ended, compared with bank loans, such as eliminating the need for collateral assessment through the red tape. Acheng district of Harbin some beef cattle breeding cooperatives, needed to buy corn capital of 2 million Yuan, and acquisition period is limited to 15 days or so, lending way to raise funds, the monthly 2%. Although much higher than bank interest, but seized the opportunity, reduce feed costs 300,000 yuan.

(c) effective complement to private lending is lending to financial institutions. There was ease the contradiction between financial structure and economic structure does not match the objective needs. Currently most parts of the country except for financial institutions, lack of specialized financing institutions for SMEs, enterprises lack other effective ways and means of financing. In reality with the narrow financing channels, on the one hand, private lending as a way of fund allocation, which diverged to some extent some credit from formal financial institutions is needed to address the funding requirements.



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