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Private lending huge hidden risks lending crisis triggered public concern

in recent days, has continued for over half a year, Wenzhou small business owners running and jumping cause public concern. A survey report of the Central Bank, at a time when private lending markets began to pick up in China last year, a stock market funds more than 2.4 trillion yuan, accounting for loan market share of more than 5%. For nearly two years, borrowing money is increasing in China, stock funds increased by more than 28%. Separate data showed that Wenzhou 89% family, individual and 59% of the enterprises are involved in private lending. And loan crisis also affected, Jiangsu, Fujian, Henan, Inner Mongolia and other provinces.

2 points to usury, 200,000, 300,000 in cash "waste"
people have been fretting about the lend their own money. Two months ago, a friend of his introduced him to have been a big boss, the man runs a well-known restaurant chain in our city, on a large scale. In one conversation, the man asked Mr SUEN to lend him money. This personal investment in Beijing for a food company, to the restaurant chain's name registered trade mark, production of local ethnic food, the prospects are very good. Money is tight at the moment, you need to raise some funds. He intended to close friends, regardless of how much return is 2 min Li, and the interest rate is monthly. He listens, 2 points Li is so good, little interest in his money in the Bank and invest in something else and afraid to take risks, just going to put my money to the project. Back to wife, wife at first worried that once a problem put the money there is no return, they think somebody else doing such a big restaurant in Harbin, everyday business was so good, then what's the problem with so many store will be fine, is lending the man 200,000 yuan in cash.

when it comes to the interest for the first time, the man said he continues to be tense, temporarily without means to pay interest. He started to get worried, he expressed the hope that as soon as repayment, interest can not. The other took out a card of her own, any consumer within a chain of his own in Harbin, par value of 300,000 yuan. Just after he got the card in less than a week later, the man's chains all shut down over night. He asked friends to know, the man's chains in many cards were sold within six months, thanks to his funding has been a problem, and more often than not in his in-store consumer's credit card, so the chain can not continue to operate in case of customer win-door shut. He threw all of a sudden, it took long time to understand that his 200,000 is hard to come back.

lack of monitoring
lending mess, "Mr SUEN's situation is typical of private lending. "An attitude of deep, bankers said. "This year, as bank channels loans control more strict there loan queues, part weak and small, relatively poor credit business began to turn to private lending market, which led to rising lending rates. "The banks argue that national monetary policy, monetary tightening from the Bank into the private market funds reduced. In addition, the large amount of financial intermediaries has also enhanced the demand for funds. Since September 2008, the Central Bank cut benchmark lending rates five times, and background of credit easing, 2009 borrowing rates have come down. In 2010, with the economy pick up, and the Central Bank raised the reserve requirement ratio, commercial bank lending pace, social expectations of monetary contraction increased borrowing interest rates began to rise.

the Bank also said, on the one hand, due to the existing State-owned bank credit rules and mode of operation, major items are always in the nature of loans of State-owned enterprises and Government focus, SMEs, private enterprise is always to the very poor a share, living in the capital bottleneck can only determine thirsty for private capital, on the extra money in the hands of the common people lack effective channel value. Two needs to push heat borrowing behavior. In fact, the private lending market is already is one of many small businesses the main source of policy tightening this year, Bank line limited, small businesses flock to the private lending momentum burst.

a commercial bank's head of wealth management said, low interest rates and high inflation, many residents took out investment funds, which flow into the field of private lending more, estimates and investment property and stock market of the world. While private lending has been common, many security companies are involved in this area, but due to management, resulting in many problems in this industry, many borrowers that their own to invest in high risk industries that profit. While many lenders are gingerly praying that their borrowers were unhurt, are often unable to guarantee their income or principal.



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