Wenzhou Legalizes Private Lending

wenzhou legalizes private lending

In November 2013, the Wenzhou Private Financing Regulation was passed at the 6th meeting of the Standing Committee of the 12th Zhejiang Provincial People’s Congress. This year, the detailed rules of the regulation were approved at the 35th executive meeting of the Wenzhou Municipal Government and will take effect on March 1, 2014 together with the regulation, a significant progress in Wenzhou’s financial reform.

Wenzhou was formally approved by the State Council on March 28, 2012 as the pilot city and a testbed for different financial reforms, the first one in China. After more than two years’ exploration, certain progress has been made in Wenzhou’s financial reform. For example, the Wenzhou Private Financing Regulation, the first local financing regulation in China, was finalized and approved in 2013; Wenzhou Interest Rate Index, a comprehensive system to reflect the average interest rate for private financing, was introduced in 2012 and issued worldwide.

According to the detailed rules of the regulation, companies hungry for funds can get private loans through three types of intermediary agencies, namely private capital management firms, financing information service firms and lending service institutions. Meanwhile, the detailed rules also prohibit certain illegal financing operations of the intermediary agencies in order to control financial risks. Furthermore, some other previously underground financing channels, such as fundraising inside enterprises, the long-history Chinese money-loan associations and rural mutual cooperatives etc are specified and included by the detailed rules of the regulation as a part of private financing.

Another highlight of the rules is the filing system for specific private loans. The record of a lender who lend more than 3 million Yuan in a single private loan and the record of collective loans with a total value of over 10 million Yuan shall be kept by Wenzhou’s lending service institutions. These institutions appeared in 2012 after the credit crisis in Wenzhou to be a platform for both lenders and borrowers. At present, there are seven such service centers in Wenzhou.

The detailed rules contain seven chapters and fifty clauses, which specify regular operations of private financing, measures to control risks as well as different legal liabilities.


Contact Us

Φ For site information, please reach us via wenzhouguide@yahoo.com

Φ 添加我们的微信来了解更多网站信息



The CWG has made every effort to offer accurate and reliable information about Wenzhou, China on this site. However, we do not accept any responsibility or liability for its accuracy, legality or reliability. We reserve the right to delete, modify or update any information listed on this site.