China Contemplating Loosening Capital Requirements on Private Lenders

A friend of mine forwarded this article: 地下钱庄阳光化提速《放贷人条例》只待共识

In short, China's central bank has a team drafting a "Lender's Law" in order to establish a legal frame work to regulate private lending.

The main contention is at source of capital for any lending institution: who can raise from where?

• 条例的最大突破是允许个人注册从事放贷业务
• 相对吸收公众存款的银行类金融机构而言，监管较宽松，
• 允许放贷人除自有资金之外，... 甚至可通过发行债券、股票等方式募集资金。
• 对放贷人的贷款利率上限管理更加灵活，规定不高于同期同类贷款基准利率的四倍。

Industry insiders say:

《放贷人条款》的融资渠道显得极为宽松 ...

民间金融机构也担心放贷人条例出台之后，监管者会限制其放贷利率，进而影响收益。

典当业界一位人士对该条例的迅速通过表示悲观

This law is not specific to MF but certainly has impact to the industry:
1. It creates a transparent legal framework (better than ad hoc policies)
2. However, too tight a restriction on raising capital or lending rates may limit hamper MF institutions