What is private financing and what are its new features?

Non-governmental financing refers to the financial behavior of temporarily changing the ownership of funds through non-governmental lending, non-governmental bill financing, non-governmental securities financing and social fund-raising for the purpose of obtaining high interest, obtaining the right to use funds and paying agreed interest.

Compared with the financing of financial institutions approved by the state according to law, private financing generally refers to the value transfer and principal and interest payment between natural persons, enterprises and other economic entities (except finance) of non-financial institutions. Private financing is a financing activity outside the formal financial institutions of the country, mainly focusing on raising funds. According to this definition, the normal commercial credit between enterprises is not within the scope of private financing. However, if the commercial credit time exceeds the time agreed in the contract and interest or other remuneration is charged, it will also be included in the category of private financing.

Private finance includes all kinds of unregistered financial forms that are not controlled by the central bank. The connotation of "folk finance" is generally included in "informal finance" (informational

Finance), informal finance includes both informal financial forms and informal products and forms of some formal financial institutions. In China, due to the large scale of private finance, it is necessary to highlight the part of private finance, rather than calling it informal finance in general.

Second, the new characteristics of private financing

According to the analysis of the report, the new features of private financing in 2004 are as follows:

Semi-public financing activities. After the introduction of personal entrusted loan business of commercial banks and macro-control, the shortage of funds of small and medium-sized private enterprises makes private financing more active, and large private financing for production investment and business activities occurs from time to time. This kind of behavior is gradually recognized by the public and turned to semi-public or open;

(B) Financing behavior is becoming increasingly rational. Due to the growing demand for private financing by the development of private small and medium-sized enterprises, it can provide higher return on investment, thus broadening the rational choice of private financing. At the same time, the risk awareness of private financing related subjects is also constantly improving, and the requirements for credibility are higher, forming a specific market access system for private financing, so there are few defaults; In addition, the proportion of productive financing has increased, and the interest rate level has also increased significantly.