Legal analysis: The competent units of microfinance companies are: China Banking Regulatory Commission and China People's Bank. In May 2008, the CBRC and the People's Bank of China jointly issued the Guiding Opinions on the Pilot Project of Small Loan Companies, which clarified the nature of small loan companies. Microfinance companies are limited liability companies or joint stock limited companies established by natural persons, corporate legal persons and other social organizations that do not absorb public deposits and operate microfinance business. Small loan companies are legal persons and bear civil liability for their debts with the property of legal persons. Microfinance companies should implement the national financial policies and conduct business within the limits of laws and regulations in accordance with the principles of self-management, self-financing and self-discipline. Their legitimate business activities are protected by law and are not interfered by any unit or individual.
Legal basis: China People's Bank Law of the People's Republic of China.
Article 28 The People's Bank of China may decide the amount, term, interest rate and method of loans to commercial banks according to the needs of implementing monetary policies, but the loan term shall not exceed one year.
Article 30 The People's Bank of China shall not provide loans to local governments and government departments at all levels, and shall not provide loans to non-bank financial institutions and other units and individuals, unless the State Council decides that the People's Bank of China may provide loans to specific non-bank financial institutions. The People's Bank of China shall not provide guarantee to any unit or individual.