Financial institutions and their branches that engage in loan business and provide loans and other related financial services approved by the financial supervision department do not belong to the category of private lending.
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The characteristics of private lending:
1. Private lending has the advantages of flexibility, convenience, high profit and quick financing. Through the market mechanism, we can accommodate all kinds of funds, serve the development of commodity economy and meet the demand for funds in production and circulation.
2. Private lending is voluntary, familiar to both borrowers and borrowers, high in credit, attractive to social hot money, and can absorb a large number of social idle funds and give full play to the effectiveness of funds.
Moreover, its interest rate leverage is highly sensitive, flexible and floating with the market, with less capital retention and simple lending procedures, which saves many intermediate links and improves the utilization rate of funds. First, it can give full play to the expected benefits of funds, which is undoubtedly an effective financing method under the current shortage of funds in China.
3. Private lending is attractive, attracting social idle funds and those intended to expand consumption to the production and circulation field to become production and circulation funds, alleviating the pressure of insufficient bank credit funds to a certain extent, and also playing a certain role in curbing consumption expansion.
Baidu encyclopedia-private lending