Research on the Policies of Local Small Loan Companies_Insights_Publications

Research on the Policies of Local Small Loan Companies

2017 02/20

1、Evolution of regulations and policies

1."Pilot Opinions on Small Loan Companies"(2008)

On May 4,2008,the China Banking Regulatory Commission and the People's Bank of China jointly promulgated the Guiding Opinions on the Pilot Work of Small Loan Companies(YJF[2008]No.23)(hereinafter referred to as the"Small Loan Pilot Opinions").The"Small Loan Pilot Opinion"puts forward the following requirements for small loan companies:

（1）Nature and establishment.A small loan company is a limited liability company or joint stock limited company established by natural persons,corporate entities,and other social organizations,which does not absorb public deposits and operates small loan business.The registered capital of a limited liability company shall not be less than 5 million yuan,and the registered capital of a joint stock limited company shall not be less than 10 million yuan.The shares held by a single natural person,corporate entity,other social organizations,and their related parties may not exceed 10%of the total registered capital of a small loan company.

（2）Source of funds.The main sources of funds for small loan companies are capital contributions from shareholders,donations,and funds received from no more than two banking financial institutions.However,the balance of funds received shall not exceed 50%of the net capital.

（3）Fund utilization.When granting loans,small loan companies should adhere to the principle of"small amount,decentralized".The loan balance of the same borrower shall not exceed 5%of the net capital of the small loan company.The upper limit of loan interest rates shall be liberalized,but shall not exceed the upper limit prescribed by the judicial department,and the lower limit shall not be lower than 0.9 times the benchmark interest rate.

（4）Supervision and management."Only those provincial governments that can specify a competent department(financial office or relevant institution)responsible for the supervision and management of small loan companies,and are willing to assume the responsibility for the risk disposal of small loan companies,can pilot the establishment of small loan companies within the county level of the province(region,city).".

Local regulations and documents on small loan companies

Up to now,30 provinces,municipalities,and autonomous regions across the country,excluding Tibet,have issued regulatory rules and guidelines for local small loan companies in accordance with the"Small Loan Pilot Opinions".Each provincial government financial office is responsible for managing the relevant businesses of small loan companies within their respective administrative areas.The following article will take the regulatory policies issued by governments in Beijing,Shanghai,Guangdong,Heilongjiang,and Chongqing as examples to compare and analyze the differences in local regulations.

2、Current business situation in various regions

According to the Statistical Data Report on Small Loan Companies for the Third Quarter of 2016 released by the Central Bank,as of the end of September 2016,there were 8741 small loan companies nationwide,with a loan balance of 929.3 billion yuan.

Among them,Jiangsu Province has the largest number of micro loan companies,reaching 633,with a maximum loan balance of 98.31 billion yuan.There are 573 micro loan companies established in Liaoning Province,ranking second.There are also Anhui,Hebei,Jilin,Guangdong,and Inner Mongolia with more than 400 companies.Chongqing and Zhejiang ranked second and third in terms of loan balances,reaching 95.54 billion yuan and 73.13 billion yuan respectively.

The following are detailed central bank statistics:

Region Name

Number of institutions

(Home)

number of people employed

(Person)

Paid-in capital

(100 million yuan)

Loan balance

(100 million yuan)

whole country

eight thousand seven hundred and forty-one

one hundred and twelve thousand six hundred and forty-six

eight thousand three hundred and seven point two

nine thousand two hundred and ninety-two point eight

Beijing

eighty-seven

one thousand two hundred and five

one hundred and twenty-five point five

one hundred and thirty-eight

Tianjin City

one hundred and ten

one thousand four hundred and fifty-five

one hundred and thirty point seven

one hundred and thirty-four point seven

Hebei Province

four hundred and fifty

six thousand two hundred and forty-eight

two hundred and fifty-six point one

two hundred and fifty-five

Shanxi Province

three hundred and nineteen

three thousand seven hundred and ninety-six

two hundred

one hundred and eighty-nine point four

Inner Mongolia Autonomous Region

four hundred and eight

three thousand eight hundred and eighty-four

two hundred and ninety point six

two hundred and ninety-six point seven

Liaoning Province

five hundred and seventy-three

five thousand eight hundred and seventy-six

three hundred and seventy-four point two

three hundred and fifteen point nine

Jilin Province

four hundred and forty-one

four thousand and thirty-seven

one hundred and seven point eight

seventy-seven point nine

Heilongjiang Province

two hundred and seventy

two thousand three hundred and fifty-three

one hundred and forty point three

one hundred and nineteen point three

Shanghai City

one hundred and twenty-two

one thousand six hundred and four

one hundred and eighty-six point three

one hundred and ninety-five point eight

Jiangsu Province

six hundred and thirty-three

six thousand two hundred and sixty-three

eight hundred and forty-five point five

nine hundred and eighty-three point one

Zhejiang Province

three hundred and thirty-four

three thousand six hundred and seventy-three

six hundred and thirty-three point three

seven hundred and thirty-one point three

Anhui Province

four hundred and fifty-one

five thousand three hundred and forty-six

three hundred and seventy point seven

four hundred and twenty-eight point six

Fujian Province

one hundred and eighteen

one thousand nine hundred and thirty-nine

two hundred and sixty-three point one

two hundred and ninety-seven point five

Jiangxi Province

two hundred and eleven

two thousand eight hundred and fifty-seven

two hundred and seventeen point eight

two hundred and thirty-seven point seven

Shandong Province

three hundred and thirty-nine

four thousand seven hundred and sixteen

four hundred and forty-one point two

four hundred and eighty-five point three

Henan Province

two hundred and ninety-eight

four thousand four hundred and fifty-nine

two hundred and fifteen point one

two hundred and twenty-eight point three

Hubei province

two hundred and eighty-four

four thousand two hundred and four

three hundred and twenty-one point eight

three hundred and eighteen point eight

Hunan Province

one hundred and twenty-eight

one thousand nine hundred and three

one hundred point two

one hundred and four point two

Guangdong Province

four hundred and thirty-three

nine thousand two hundred and thirty-three

six hundred and fifteen point seven

six hundred and seventy-four point five

Guangxi Zhuang Autonomous Region

three hundred and thirteen

four thousand two hundred and eighty-five

two hundred and fifty-four point three

four hundred and seventy-nine point eight

Hainan

forty-four

six hundred and thirty-three

forty-six point four

fifty point seven

Chongqing City

two hundred and fifty-five

six thousand and eleven

six hundred and sixteen point nine

nine hundred and fifty-five point four

Sichuan Province

three hundred and forty-seven

seven thousand one hundred and sixty-nine

five hundred and eighty-one point six

six hundred and forty-one point eight

Guizhou Province

two hundred and eighty-eight

three thousand two hundred and forty-nine

ninety point one

eighty-three point four

Yunnan Province

three hundred and forty-nine

three thousand eight hundred and forty-eight

one hundred and sixty-seven point nine

one hundred and sixty-nine

Tibet Autonomous Region

fourteen

one hundred and thirty-one

eleven point three

six point eight

Shaanxi Province

two hundred and seventy-four

three thousand and eighty-five

two hundred and fifty-two point seven

two hundred and forty-nine point five

Gansu Province

three hundred and thirty-five

three thousand five hundred and ninety-five

one hundred and forty-two

one hundred and seventeen point seven

Qinghai Province

seventy-six

eight hundred and seventy-one

forty-eight point six

fifty point five

Ningxia Hui Autonomous Region

one hundred and fifty-one

one thousand nine hundred and seventy-four

seventy-four point eight

sixty-seven

Xinjiang Uygur Autonomous Region

two hundred and eighty-six

two thousand seven hundred and forty-four

one hundred and eighty-four point seven

two hundred and nine

3、Comparison of policies of local microfinance companies

Taking the guidance of the Central Bank and the CBRC,as well as the regulatory policies issued by governments in Beijing,Shanghai,Guangdong,Heilongjiang,and Chongqing as examples,we compared and analyzed the similarities and differences in the establishment conditions,operational processes,and regulatory systems of microfinance companies in various regions.

Currently,the regulatory rules and guidelines for local small loan companies issued by various regions have basically taken the"Small Loan Pilot Opinions"formulated by the Central Bank's Banking Regulatory Commission as the core,and adjusted the establishment requirements and regulatory measures in combination with the economic conditions of various regions.

In terms of registered capital,Shanghai has the highest level of requirements,reaching between 100 million and 200 million yuan.Beijing took the second place,with 50 million to 100 million yuan.The level of Guangdong and Heilongjiang is similar,ranging from 30 million to 50 million yuan.Chongqing has relatively low requirements,requiring only 20 to 30 million yuan.

In terms of shareholder composition,Beijing,Shanghai,and Heilongjiang have not explicitly supported the entry of foreign capital,while Guangdong and Chongqing have indicated in regulatory measures that they accept foreign capital entry,and the governments of Guangdong and Chongqing have also issued documents encouraging foreign capital entry.

In terms of equity structure,Beijing,Shanghai,and Heilongjiang still have relatively strict control ratios.Guangdong and Chongqing have broken through the restrictions on equity structure,supporting sole proprietorship or a small proportion of investment.

Regarding the operation and financing of small loan companies,most provinces still follow the opinions of the Central Bank's Banking Regulatory Commission,and their main sources of funding are capital contributions from shareholders,donations,and integration funds from no more than two banking financial institutions.The balance of funds received from banking financial institutions shall not exceed 50%of net capital.Chongqing has broken this restriction by allowing microfinance companies to borrow from multiple banking financial institutions or major shareholders,with the total financing balance not exceeding 100%of the company's net capital.

The establishment process is mainly divided into the following two modes:

The first involves going through two stages:preparation and opening.The competent departments at the county and district levels are responsible for the preliminary review of the establishment of small loan companies,the municipal competent departments are responsible for the review of the establishment of small loan companies,and the provincial competent departments are responsible for the approval of the establishment of small loan companies.After the approval of the preparation application,the preparation team will start the preparation work,and after the preparation is completed,the application for opening will be submitted to the provincial competent department.Beijing,Heilongjiang,and Chongqing have adopted this approach.

The second method is for the main sponsors of small loan companies selected by the county(city,district)government to submit application materials for the establishment of small loan companies,and then the county(city,district)government will transfer them level by level to the financial work department of the provincial government for approval.Shanghai and Guangdong have adopted this approach.

The following is a detailed policy comparison:

（1）Comparison of establishment conditions

region

registered capital

Shareholder qualification

ownership structure

Senior management

Shareholder composition

Main initiator

CBRC, Central Bank

Limited company ≥ 5 million yuan; Joint stock company ≥ 10 million yuan

Natural persons, corporate entities, and other social organizations

nothing

Single shareholder holding ≤ 10% of total registered capital

Possess corresponding professional knowledge and experience

Beijing

Limited company ≥ 50 million yuan: joint-stock company ≥ 100 million yuan

Natural persons, corporate entities, and other social organizations

nothing

① Single largest shareholder holding ≤ 30% of total registered capital

② 1% of total registered capital ≤ shareholding by other single shareholders ≤ 20% of total registered capital

Have a bachelor's degree or above, have worked in the financial field for at least 3 years, or have been engaged in relevant economic management work for at least 5 years; Or college degree or above, with over 8 years of experience in the financial field

Shanghai

New companies ≥ 200 million yuan (mainly providing credit services for small and micro enterprises in the mass entrepreneurship space ≥ 100 million yuan)

Natural persons, corporate entities, and other social organizations

① Enterprise legal person registered in Shanghai

② Net assets ≥ 100 million yuan, asset liability ratio ≤ 70%, profit for three consecutive years, and total profit ≥ 30 million yuan

① Shares held by the main sponsor and related parties ≤ 80%

② ≥ 2 general promoters who are not related to the main promoters

③ 1% of total registered capital ≤ shareholding by a single shareholder

Have corresponding financial knowledge and experience

Guangdong

Limited companies ≥ 30 million yuan (mountainous areas ≥ 15 million yuan); Joint stock company ≥ 50 million yuan (mountain area ≥ 20 million yuan)

Natural persons, corporate entities, other social organizations, overseas microfinance organizations or financial institutions

① Enterprise legal person

② Net assets ≥ 50 million yuan, asset liability ratio ≤ 70%, consecutive 3 years of profit and total profit ≥ 10 million yuan, net profit ≥ 3 million yuan in the latest year

③ Mountain counties (cities, districts): net assets ≥ 20 million yuan, asset liability ratio ≤ 70%, consecutive three years of profit and total profit ≥ 5 million yuan, net profit ≥ 1.5 million yuan in the last year

① There is no upper limit on the shareholding ratio of the main sponsor and its related parties

② No lower limit for shareholding ratio of other shareholders

① Directors and supervisors are under the age of 65, have a college degree or above, and have been engaged in relevant economic work for more than 3 years

② The chairman and manager have a college degree or above, have been engaged in banking for more than 5 years, or have been engaged in relevant economic work for more than 8 years

Heilongjiang

30 million yuan (municipal level 40 million yuan) ≤ limited company, 60 million yuan (municipal level 80 million yuan) ≤ joint-stock company

100 million yuan ≤ Hong Kong, Macao, and Taiwan funded companies

Natural persons, corporate entities, and other social organizations

① Domestic or Hong Kong, Macao, and Taiwan enterprises as legal persons have been established for at least three years

② Registered capital of the enterprise ≥ 1 million yuan

③ Net assets of the previous year ≥ 15 million yuan, asset-liability ratio ≤ 60%, and the sum of profits for two consecutive years ≥ 6 million yuan

① Shares held by a single main sponsor ≤ 40% of the total registered capital

② Total registered capital 5 ‰ ≤ Shares held by other single shareholders ≤ 20% of total registered capital

③ Shares held by Hong Kong, Macao and Taiwan ≤ 60% of the total registered capital

College degree or above, with over 8 years of relevant economic management experience or over 5 years of banking experience

Chongqing

Limited companies ≥ 20 million yuan; Joint stock company ≥ 30 million yuan

Natural person, enterprise legal person, other social organizations, overseas enterprise legal person

nothing

① Shareholding ratio of controlling shareholders ≥ 20% of total registered capital

② There is no lower limit for the shareholding ratio of general shareholders in public companies, and the shareholding ratio of general shareholders in non-public companies is ≥ 0.5% of the total registered capital;

③ The shareholding ratio of the controlling shareholders of a limited liability company can reach up to 100%, and the shareholding ratio of the controlling shareholders of a joint stock limited company with related parties and persons acting in concert is less than or equal to 90%

At least 2 people with at least 3 years of financial or related work experience

（2）Comparison of operation processes

region

scope of business

Financing and loan issuance requirements

Establishment process

CBRC, Central Bank

Small loan business

Financing: financing balance of no more than two banking financial institutions ≤ 50% of net capital

Loan issuance: loan balance of the same borrower ≤ 5% of net capital

To apply for the establishment of a small loan company, a formal application should be submitted to the competent department of the provincial government. Upon approval, an application for registration and a business license should be submitted to the local administrative department for industry and commerce. In addition, relevant materials should also be submitted to the local public security organ, the representative office of the China Banking Regulatory Commission, and the branch office of the People's Bank of China within five working days.

Beijing

Small loan business

Financing: financing balance of no more than two banking financial institutions ≤ 50% of net capital

Loan issuance: ① Loan amount for agriculture, rural areas, and farmers ≥ 70% of the annual cumulative loan amount

② Loan balance of the same borrower ≤ 3% of net capital

① To apply for the establishment of a small loan company, one should first apply for preparation. The applicant shall submit the application materials for the establishment of the proposed small loan company to the district and county authorities.

② The applicant shall obtain an application form for opening business from the district or county competent department where the proposed small loan company is located by presenting the approval preparation documents.

③ The applicant shall complete the preparation work within 3 months from the date of approval and submit an application for establishment.

④ The establishment of a small loan company approved by the municipal competent department shall be registered and issued a business license by the municipal administrative department for industry and commerce.

Shanghai

① Small loan business

② Related consultation activities

Financing: financing balance of no more than two banking financial institutions ≤ 50% of net capital

Loan issuance: loan balance of the same borrower ≤ 5% of net capital

① The main promoters of small loan companies selected by the pilot district/county government should submit application materials for the establishment of small loan companies to the local county government. The district and county governments shall complete the preliminary review within 15 working days after receiving the application materials submitted by the main sponsors of the small loan company.

② The pilot district/county government will submit the application materials and preliminary review opinions for the establishment of small loan companies that have passed the preliminary review to the municipal promotion team. After soliciting opinions from relevant member units, the Municipal Finance Office shall make a decision on whether to agree or not within 15 working days.

③ The applicant for a small loan company shall, on the strength of the approval document from the Municipal Finance Office, register with the administrative department for industry and commerce according to law and obtain a business license. In addition, relevant materials should also be submitted to the local public security organ, Shanghai Banking Regulatory Bureau, and the Shanghai headquarters of the People's Bank of China within 5 working days

Guangdong

① Small loan business

② Other approved businesses

Financing: financing balance of no more than two banking financial institutions ≤ 50% of net capital

Loan issuance: ① Loan balance of the same borrower ≤ 5% of net capital

② Loan balance of the same borrower ≤ 5 million yuan

① The main sponsor (or largest shareholder) of a small loan company selected by the pilot county (city, district) government should submit application materials for the establishment of a small loan company to the county (city, district) government where the proposed location is located

② The pilot county (city, district) government shall complete the preliminary review within 15 working days after receiving the application materials submitted by the main sponsor (or largest shareholder) of the small loan company, provide review opinions on the completeness and authenticity of the application materials, and formulate a pilot application plan for the small loan company and report it to the local financial service office

③ The Provincial Financial Office has established an Institutional Access Review Committee to review the opening applications of small loan companies in accordance with the law.

④ "A small loan company that has been approved for operation shall, based on the documents approving the establishment of a small loan company, register with the local administrative department for industry and commerce according to law and obtain a business license;"; And submit relevant materials to the local public security organ, the representative office of the China Banking Regulatory Commission, and the branch office of the People's Bank of China within 5 working days after receiving the business license.

Guangdong

① Small loan business

② Bill Discount Business

③ Asset transfer business and agency business

Financing: financing balance of no more than two banking financial institutions ≤ 50% of net capital

Loan issuance: ① Loan balance of the same borrower ≤ 5% of net capital

② Credit balance of single group enterprise customer ≤ 15% of net capital

① The establishment of a small loan company should go through two stages: preparation and opening up. The county-level competent department is responsible for conducting a preliminary review of the establishment of small loan companies, the municipal competent department is responsible for reviewing the establishment of small loan companies, and the provincial competent department is responsible for approving the establishment of small loan companies.

② The maximum preparation period for the establishment of a small loan company is 6 months from the date of approval. Applicants who meet the conditions for opening up during the preparation period can submit an application for opening up.

③ "For a small loan company that has been approved for operation, the provincial competent department shall issue an approval document, and within 2 months from the date of approval, handle the registration and other procedures in accordance with normal procedures, obtain a business license, and conduct external business based on the approval document.". After obtaining a business license, a small loan company should also submit relevant materials to the local public security organ, the representative office of the China Banking Regulatory Commission, and the branch office of the People's Bank of China within 5 working days.

Chongqing

① Handle various loans;

② Handle bill discounting;

③ Handle asset transfer.

Financing: financing balance of multiple banking financial institutions or directional borrowings from major shareholders ≤ 100% of net capital

Loan issuance: ① Loan balance of the same borrower ≤ 5% of net capital

② Credit balance of single group enterprise customer ≤ 15% of net capital

① The establishment of a small loan company must go through two stages: preparation and opening. "To prepare for the establishment of a small loan company, all contributors shall jointly submit the preparation application to the Municipal Government Finance Office as the applicant, which shall accept, review, and decide.".

② The small loan company shall apply for name pre approval to the industrial and commercial administrative authority with the preparation approval document issued by the Municipal Government Finance Office.

③ "To open a small loan company, its preparatory group shall submit an application for opening to the Municipal Government Finance Office, which shall accept, review, and decide.".

④ The applicant shall apply for establishment registration with the local industrial and commercial administration authority within 90 days from the date of approval of the opening of the business by the Financial Office of the Municipal Government.

（3）Comparison of regulatory systems

region

supervision system

CBRC, Central Bank

"Only those provincial governments that can specify a competent department (financial office or relevant institution) responsible for the supervision and management of small loan companies, and are willing to assume the responsibility for the risk disposal of small loan companies, can pilot the establishment of small loan companies within the county level of the province (region, city).".

Beijing

① The Beijing Municipal Bureau of Financial Affairs is the municipal competent department for small loan companies in this city, responsible for the overall coordination, approval, supervision, risk prevention and disposal of the pilot work of small loan companies in the city The district/county competent department is responsible for the preliminary review, daily supervision and management, risk prevention and disposal of the local district/county small loan company.

③ The Business Management Department of the People's Bank of China tracks and monitors the interest rates and capital flows of small loan companies.

④ The district/county finance bureau is the daily supervision department of financial accounting for small loan companies.

Shanghai

① The pilot work promotion group for Shanghai Municipal Small Loan Companies (hereinafter referred to as the "Municipal Promotion Group") is headed by the leaders in charge of the municipal government. The member units include the Municipal Finance Office, the Shanghai Headquarters of the People's Bank of China, the Shanghai Banking Regulatory Bureau, the Municipal Bureau of Industry and Commerce, the Municipal Agriculture Commission, the Municipal Economic Information Technology Commission, the Municipal Finance Bureau, the Municipal Public Security Bureau, the Legislative Affairs Office of the Municipal Government, the Municipal Commission of Commerce, the Municipal Housing and Urban-Rural Development Management Commission, and the Municipal Local Taxation Bureau.

② The main functions of the Municipal Promotion Group are to coordinate the pilot work of small loan companies; The second is to approve the pilot area for small loan companies; Third, coordinate and solve relevant issues in the pilot process of small loan companies; Fourth, guide the district and county governments and relevant departments to do a good job in the supervision and management of small loan companies and risk management.

③ The Municipal Finance Office is the competent department for the pilot work of small loan companies in this city. In addition to undertaking the daily work of the Municipal Promotion Group, its main functions are: first, to be responsible for accepting district pilot applications; Responsible for reviewing pilot applications for small loan companies and other matters; Responsible for the annual classification and evaluation of small loan companies; Fourth, urge the district and county governments and relevant departments to do a good job in daily supervision and management of small loan companies and risk management.

Guangdong

① The Provincial Finance Office is the competent department for the pilot work of small loan companies in the province, and its main responsibilities are: (1) Responsible for formulating the development plan for the small loan industry in the province; （2） Organize an institutional access review committee to conduct qualification reviews on matters such as the application for the establishment of small loan companies reported by various municipal financial offices; （3） Approve the application for capital increase and share expansion of small loan companies reported by the municipal financial offices; （4） Formulate unified internal control guidelines such as credit; （5） Regularly organize inspection and evaluation of the pilot work of small loan companies; （6） Supervise and guide the relevant departments of the municipal and county (city, district) governments to properly supervise and handle the risks of small loan companies, and propose regulatory opinions on small loan companies according to regulatory needs.

② The main responsibilities of the Municipal Finance Office are: (1) selecting pilot counties (cities, districts) and reporting them to the municipal government for decision; （2） Conduct qualification review on matters such as the application for the establishment of a small loan company reported by the county (city, district) government, and propose opinions on whether to agree with the proposed establishment, which shall be submitted to the provincial financial office for review and decision; （3） Review the application for capital and share increase of a small loan company reported by the county (city, district) government, propose opinions on whether to agree with the proposed capital and share increase, and report to the Provincial Financial Office for review and decision; （4） Review the qualifications of directors and senior managers of small loan companies, and report to the Provincial Finance Office for filing; （5） Strengthen off-site and on-site supervision of small loan companies within their jurisdiction (mainly off-site supervision); （6） Urge the county (city, district) government departments to strengthen the daily supervision of small loan companies; （7） Regularly submit statistical information on the finance, operation, and financing of small loan companies to the Provincial Finance Office, comprehensively evaluate small loan companies on an annual basis, and report to the Provincial Finance Office.

③ The main responsibilities of the county (city, district) government carrying out the pilot project include: (1) selecting the main sponsors (or the largest shareholders) applying for the establishment of a small loan company, and submitting them to the superior competent department for approval; （2） Preliminary examination of the qualifications of directors and senior managers of small loan companies; （3） Review the completeness and authenticity of the application materials of small loan companies; （4） Preliminary examination of the application for capital increase and share expansion of small loan companies; （5） Daily supervision of small loan companies; （6） Take responsibility for risk prevention and disposal; （7） Designate a specialized agency to be responsible for the daily supervision of small loan companies.

For prefecture-level cities without jurisdiction over counties (cities, districts), the corresponding responsibilities shall be borne by the prefecture-level city finance office.

Heilongjiang

The provincial government authorizes the Provincial Financial Work Office (hereinafter referred to as the Provincial Financial Office) to act as the competent department for the pilot work of small loan companies throughout the province, responsible for the approval, supervision and management of small loan companies throughout the province. Each city (prefecture) and county (city) government (agency) is responsible for the daily supervision and management of local small loan companies and assumes responsibility for risk disposal.

Chongqing

① The Financial Office of the Municipal People's Government takes the lead in establishing a coordinated regulatory mechanism involving multiple parties. The Financial Office of the Municipal Government is responsible for organizing the pilot work, supervision and management, and risk disposal of small loan companies, organizing departments such as industrial and commercial administration, public security, the People's Bank of China, and banking supervision to monitor the flow of funds, and severely cracking down on illegal financial activities such as illegal fund-raising and usury.

② The Financial Office of the Municipal Government has established a supervision and inspection system that combines off-site supervision and on-site inspection, and regularly or irregularly conducts inspections on small loan companies. According to regulatory needs, the Municipal Government Finance Office may require small loan companies to hire intermediaries with appropriate business qualifications to conduct special audits or audits of small loan companies, with the relevant fees paid by the small loan companies.

Wang Na(Gaopeng Law Firm)

Partner Lawyer Contact:010-59241034 Email:wangna gaopenglaw.com Partner of Beijing Gaopeng Law Firm.Master of Law,Temple University,USA;LLM,University of Manchester,UK;Bachelor of Law from Tsinghua University.Chinese practicing lawyer,New York State lawyer.Before joining Gaopeng,Lawyer Wang Na worked in well-known law firms at home and abroad for over ten years.During her many years of practice,Lawyer Wang Na has accumulated rich practical experience in business fields such as investment and acquisition,foreign investment,overseas investment of Chinese enterprises,and asset management.

Hao Peijun(Gaopeng Law Firm)

Lawyer Assistant of Beijing Gaopeng Law Firm

Gaopeng Law Firm

http://www.gaopenglaw.com/

Beijing Gaopeng&Partners Law Firm was founded in early 1998.After more than ten years of development,it has become a comprehensive law firm focusing on corporate investment and financing,mergers and acquisitions,WTO and international trade,antitrust law,large-scale infrastructure projects,cultural,sports and entertainment industries,real estate,intellectual property rights,litigation and arbitration.Over the years,the firm has adhered to the concept of high-quality,efficient,and professional service,providing effective legal services to well-known enterprises,government departments,well-known personages,and other customers at home and abroad,and has gained a good reputation at home and abroad.

This article is translated by software translator for reference only.

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Region Name	Number of institutions (Home)	number of people employed (Person)	Paid-in capital (100 million yuan)	Loan balance (100 million yuan)
whole country	eight thousand seven hundred and forty-one	one hundred and twelve thousand six hundred and forty-six	eight thousand three hundred and seven point two	nine thousand two hundred and ninety-two point eight
Beijing	eighty-seven	one thousand two hundred and five	one hundred and twenty-five point five	one hundred and thirty-eight
Tianjin City	one hundred and ten	one thousand four hundred and fifty-five	one hundred and thirty point seven	one hundred and thirty-four point seven
Hebei Province	four hundred and fifty	six thousand two hundred and forty-eight	two hundred and fifty-six point one	two hundred and fifty-five
Shanxi Province	three hundred and nineteen	three thousand seven hundred and ninety-six	two hundred	one hundred and eighty-nine point four
Inner Mongolia Autonomous Region	four hundred and eight	three thousand eight hundred and eighty-four	two hundred and ninety point six	two hundred and ninety-six point seven
Liaoning Province	five hundred and seventy-three	five thousand eight hundred and seventy-six	three hundred and seventy-four point two	three hundred and fifteen point nine
Jilin Province	four hundred and forty-one	four thousand and thirty-seven	one hundred and seven point eight	seventy-seven point nine
Heilongjiang Province	two hundred and seventy	two thousand three hundred and fifty-three	one hundred and forty point three	one hundred and nineteen point three
Shanghai City	one hundred and twenty-two	one thousand six hundred and four	one hundred and eighty-six point three	one hundred and ninety-five point eight
Jiangsu Province	six hundred and thirty-three	six thousand two hundred and sixty-three	eight hundred and forty-five point five	nine hundred and eighty-three point one
Zhejiang Province	three hundred and thirty-four	three thousand six hundred and seventy-three	six hundred and thirty-three point three	seven hundred and thirty-one point three
Anhui Province	four hundred and fifty-one	five thousand three hundred and forty-six	three hundred and seventy point seven	four hundred and twenty-eight point six
Fujian Province	one hundred and eighteen	one thousand nine hundred and thirty-nine	two hundred and sixty-three point one	two hundred and ninety-seven point five
Jiangxi Province	two hundred and eleven	two thousand eight hundred and fifty-seven	two hundred and seventeen point eight	two hundred and thirty-seven point seven
Shandong Province	three hundred and thirty-nine	four thousand seven hundred and sixteen	four hundred and forty-one point two	four hundred and eighty-five point three
Henan Province	two hundred and ninety-eight	four thousand four hundred and fifty-nine	two hundred and fifteen point one	two hundred and twenty-eight point three
Hubei province	two hundred and eighty-four	four thousand two hundred and four	three hundred and twenty-one point eight	three hundred and eighteen point eight
Hunan Province	one hundred and twenty-eight	one thousand nine hundred and three	one hundred point two	one hundred and four point two
Guangdong Province	four hundred and thirty-three	nine thousand two hundred and thirty-three	six hundred and fifteen point seven	six hundred and seventy-four point five
Guangxi Zhuang Autonomous Region	three hundred and thirteen	four thousand two hundred and eighty-five	two hundred and fifty-four point three	four hundred and seventy-nine point eight
Hainan	forty-four	six hundred and thirty-three	forty-six point four	fifty point seven
Chongqing City	two hundred and fifty-five	six thousand and eleven	six hundred and sixteen point nine	nine hundred and fifty-five point four
Sichuan Province	three hundred and forty-seven	seven thousand one hundred and sixty-nine	five hundred and eighty-one point six	six hundred and forty-one point eight
Guizhou Province	two hundred and eighty-eight	three thousand two hundred and forty-nine	ninety point one	eighty-three point four
Yunnan Province	three hundred and forty-nine	three thousand eight hundred and forty-eight	one hundred and sixty-seven point nine	one hundred and sixty-nine
Tibet Autonomous Region	fourteen	one hundred and thirty-one	eleven point three	six point eight
Shaanxi Province	two hundred and seventy-four	three thousand and eighty-five	two hundred and fifty-two point seven	two hundred and forty-nine point five
Gansu Province	three hundred and thirty-five	three thousand five hundred and ninety-five	one hundred and forty-two	one hundred and seventeen point seven
Qinghai Province	seventy-six	eight hundred and seventy-one	forty-eight point six	fifty point five
Ningxia Hui Autonomous Region	one hundred and fifty-one	one thousand nine hundred and seventy-four	seventy-four point eight	sixty-seven
Xinjiang Uygur Autonomous Region	two hundred and eighty-six	two thousand seven hundred and forty-four	one hundred and eighty-four point seven	two hundred and nine

region	registered capital	Shareholder qualification		ownership structure	Senior management
region	registered capital	Shareholder composition	Main initiator	ownership structure	Senior management
CBRC, Central Bank	Limited company ≥ 5 million yuan; Joint stock company ≥ 10 million yuan	Natural persons, corporate entities, and other social organizations	nothing	Single shareholder holding ≤ 10% of total registered capital	Possess corresponding professional knowledge and experience
Beijing	Limited company ≥ 50 million yuan: joint-stock company ≥ 100 million yuan	Natural persons, corporate entities, and other social organizations	nothing	① Single largest shareholder holding ≤ 30% of total registered capital ② 1% of total registered capital ≤ shareholding by other single shareholders ≤ 20% of total registered capital	Have a bachelor's degree or above, have worked in the financial field for at least 3 years, or have been engaged in relevant economic management work for at least 5 years; Or college degree or above, with over 8 years of experience in the financial field
Shanghai	New companies ≥ 200 million yuan (mainly providing credit services for small and micro enterprises in the mass entrepreneurship space ≥ 100 million yuan)	Natural persons, corporate entities, and other social organizations	① Enterprise legal person registered in Shanghai ② Net assets ≥ 100 million yuan, asset liability ratio ≤ 70%, profit for three consecutive years, and total profit ≥ 30 million yuan	① Shares held by the main sponsor and related parties ≤ 80% ② ≥ 2 general promoters who are not related to the main promoters ③ 1% of total registered capital ≤ shareholding by a single shareholder	Have corresponding financial knowledge and experience
Guangdong	Limited companies ≥ 30 million yuan (mountainous areas ≥ 15 million yuan); Joint stock company ≥ 50 million yuan (mountain area ≥ 20 million yuan)	Natural persons, corporate entities, other social organizations, overseas microfinance organizations or financial institutions	① Enterprise legal person ② Net assets ≥ 50 million yuan, asset liability ratio ≤ 70%, consecutive 3 years of profit and total profit ≥ 10 million yuan, net profit ≥ 3 million yuan in the latest year ③ Mountain counties (cities, districts): net assets ≥ 20 million yuan, asset liability ratio ≤ 70%, consecutive three years of profit and total profit ≥ 5 million yuan, net profit ≥ 1.5 million yuan in the last year	① There is no upper limit on the shareholding ratio of the main sponsor and its related parties ② No lower limit for shareholding ratio of other shareholders	① Directors and supervisors are under the age of 65, have a college degree or above, and have been engaged in relevant economic work for more than 3 years ② The chairman and manager have a college degree or above, have been engaged in banking for more than 5 years, or have been engaged in relevant economic work for more than 8 years
Heilongjiang	30 million yuan (municipal level 40 million yuan) ≤ limited company, 60 million yuan (municipal level 80 million yuan) ≤ joint-stock company 100 million yuan ≤ Hong Kong, Macao, and Taiwan funded companies	Natural persons, corporate entities, and other social organizations	① Domestic or Hong Kong, Macao, and Taiwan enterprises as legal persons have been established for at least three years ② Registered capital of the enterprise ≥ 1 million yuan ③ Net assets of the previous year ≥ 15 million yuan, asset-liability ratio ≤ 60%, and the sum of profits for two consecutive years ≥ 6 million yuan	① Shares held by a single main sponsor ≤ 40% of the total registered capital ② Total registered capital 5 ‰ ≤ Shares held by other single shareholders ≤ 20% of total registered capital ③ Shares held by Hong Kong, Macao and Taiwan ≤ 60% of the total registered capital	College degree or above, with over 8 years of relevant economic management experience or over 5 years of banking experience
Chongqing	Limited companies ≥ 20 million yuan; Joint stock company ≥ 30 million yuan	Natural person, enterprise legal person, other social organizations, overseas enterprise legal person	nothing	① Shareholding ratio of controlling shareholders ≥ 20% of total registered capital ② There is no lower limit for the shareholding ratio of general shareholders in public companies, and the shareholding ratio of general shareholders in non-public companies is ≥ 0.5% of the total registered capital; ③ The shareholding ratio of the controlling shareholders of a limited liability company can reach up to 100%, and the shareholding ratio of the controlling shareholders of a joint stock limited company with related parties and persons acting in concert is less than or equal to 90%	At least 2 people with at least 3 years of financial or related work experience

region	supervision system
CBRC, Central Bank	"Only those provincial governments that can specify a competent department (financial office or relevant institution) responsible for the supervision and management of small loan companies, and are willing to assume the responsibility for the risk disposal of small loan companies, can pilot the establishment of small loan companies within the county level of the province (region, city).".
Beijing	① The Beijing Municipal Bureau of Financial Affairs is the municipal competent department for small loan companies in this city, responsible for the overall coordination, approval, supervision, risk prevention and disposal of the pilot work of small loan companies in the city The district/county competent department is responsible for the preliminary review, daily supervision and management, risk prevention and disposal of the local district/county small loan company. ③ The Business Management Department of the People's Bank of China tracks and monitors the interest rates and capital flows of small loan companies. ④ The district/county finance bureau is the daily supervision department of financial accounting for small loan companies.
Shanghai	① The pilot work promotion group for Shanghai Municipal Small Loan Companies (hereinafter referred to as the "Municipal Promotion Group") is headed by the leaders in charge of the municipal government. The member units include the Municipal Finance Office, the Shanghai Headquarters of the People's Bank of China, the Shanghai Banking Regulatory Bureau, the Municipal Bureau of Industry and Commerce, the Municipal Agriculture Commission, the Municipal Economic Information Technology Commission, the Municipal Finance Bureau, the Municipal Public Security Bureau, the Legislative Affairs Office of the Municipal Government, the Municipal Commission of Commerce, the Municipal Housing and Urban-Rural Development Management Commission, and the Municipal Local Taxation Bureau. ② The main functions of the Municipal Promotion Group are to coordinate the pilot work of small loan companies; The second is to approve the pilot area for small loan companies; Third, coordinate and solve relevant issues in the pilot process of small loan companies; Fourth, guide the district and county governments and relevant departments to do a good job in the supervision and management of small loan companies and risk management. ③ The Municipal Finance Office is the competent department for the pilot work of small loan companies in this city. In addition to undertaking the daily work of the Municipal Promotion Group, its main functions are: first, to be responsible for accepting district pilot applications; Responsible for reviewing pilot applications for small loan companies and other matters; Responsible for the annual classification and evaluation of small loan companies; Fourth, urge the district and county governments and relevant departments to do a good job in daily supervision and management of small loan companies and risk management.
Guangdong	① The Provincial Finance Office is the competent department for the pilot work of small loan companies in the province, and its main responsibilities are: (1) Responsible for formulating the development plan for the small loan industry in the province; （2） Organize an institutional access review committee to conduct qualification reviews on matters such as the application for the establishment of small loan companies reported by various municipal financial offices; （3） Approve the application for capital increase and share expansion of small loan companies reported by the municipal financial offices; （4） Formulate unified internal control guidelines such as credit; （5） Regularly organize inspection and evaluation of the pilot work of small loan companies; （6） Supervise and guide the relevant departments of the municipal and county (city, district) governments to properly supervise and handle the risks of small loan companies, and propose regulatory opinions on small loan companies according to regulatory needs. ② The main responsibilities of the Municipal Finance Office are: (1) selecting pilot counties (cities, districts) and reporting them to the municipal government for decision; （2） Conduct qualification review on matters such as the application for the establishment of a small loan company reported by the county (city, district) government, and propose opinions on whether to agree with the proposed establishment, which shall be submitted to the provincial financial office for review and decision; （3） Review the application for capital and share increase of a small loan company reported by the county (city, district) government, propose opinions on whether to agree with the proposed capital and share increase, and report to the Provincial Financial Office for review and decision; （4） Review the qualifications of directors and senior managers of small loan companies, and report to the Provincial Finance Office for filing; （5） Strengthen off-site and on-site supervision of small loan companies within their jurisdiction (mainly off-site supervision); （6） Urge the county (city, district) government departments to strengthen the daily supervision of small loan companies; （7） Regularly submit statistical information on the finance, operation, and financing of small loan companies to the Provincial Finance Office, comprehensively evaluate small loan companies on an annual basis, and report to the Provincial Finance Office. ③ The main responsibilities of the county (city, district) government carrying out the pilot project include: (1) selecting the main sponsors (or the largest shareholders) applying for the establishment of a small loan company, and submitting them to the superior competent department for approval; （2） Preliminary examination of the qualifications of directors and senior managers of small loan companies; （3） Review the completeness and authenticity of the application materials of small loan companies; （4） Preliminary examination of the application for capital increase and share expansion of small loan companies; （5） Daily supervision of small loan companies; （6） Take responsibility for risk prevention and disposal; （7） Designate a specialized agency to be responsible for the daily supervision of small loan companies. For prefecture-level cities without jurisdiction over counties (cities, districts), the corresponding responsibilities shall be borne by the prefecture-level city finance office.
Heilongjiang	The provincial government authorizes the Provincial Financial Work Office (hereinafter referred to as the Provincial Financial Office) to act as the competent department for the pilot work of small loan companies throughout the province, responsible for the approval, supervision and management of small loan companies throughout the province. Each city (prefecture) and county (city) government (agency) is responsible for the daily supervision and management of local small loan companies and assumes responsibility for risk disposal.
Chongqing	① The Financial Office of the Municipal People's Government takes the lead in establishing a coordinated regulatory mechanism involving multiple parties. The Financial Office of the Municipal Government is responsible for organizing the pilot work, supervision and management, and risk disposal of small loan companies, organizing departments such as industrial and commercial administration, public security, the People's Bank of China, and banking supervision to monitor the flow of funds, and severely cracking down on illegal financial activities such as illegal fund-raising and usury. ② The Financial Office of the Municipal Government has established a supervision and inspection system that combines off-site supervision and on-site inspection, and regularly or irregularly conducts inspections on small loan companies. According to regulatory needs, the Municipal Government Finance Office may require small loan companies to hire intermediaries with appropriate business qualifications to conduct special audits or audits of small loan companies, with the relevant fees paid by the small loan companies.