We can Meet the Financial Regulation Only When the Main Part of Consumer Finance is the Young People (IV)

Consumer finance is worthy of vigorous development, and cash loans are not a savage beast. Its emergence is also in line with market needs.

In the past few decades, private financial needs have been suppressed, and individuals with borrowing needs can only rely on underground banks. Of course, those underground money houses are more to meet the private enterprise's production, not personal consumption. Therefore, today China has opened up private finance because of the Internet, and many of the original transactions in the underground have moved to the Internet. It is not surprising that there are some problems in this, and all the participants need to learn while walking. If, because of a small number of cases, it is wrong to deny the lending company's contribution to satisfying 99% of consumer demand.

In fact, in addition to the poor reputation of some lenders, other platforms still hope to grow as a formal business company, rather than defrauding or extorting. Prohibiting cash loans does not solve all the problems. If these transactions are transferred to the gray area or underground, the damage may be even greater. Therefore, on the one hand, we should strengthen the people's financial common sense education, have good wealth management habits, and on the other hand, through the use of big data, risk control and other technologies, establish a social credit information system and reduce the cost of the loan company's risk control, so that they have more great motivation to serve consumers at a lower interest rate. Although regulators and public opinion have been demanding the reform of traditional financial institutions to provide services to the general public, they are more willing to be lucrative corporate clients or high-net-worth customers, rather than doing some profit-making, high-risk personal consumption, this is understandable.Pay attention to buy seamless steel pipes.

Therefore, those Internet finance companies that have the technology and are willing to earn 'hard money', borrowing large sums of money from these traditional big banks, and then carefully and patiently making a small loan, this model should continue, and It also meets the characteristics of the consumer finance market. Today, including the central bank and some financial technology companies are establishing their own credit systems and credit information service systems, which is a good thing for the whole society. However, these jobs cannot be done by one family only, because once the credit service system and the database are monopolized, there will be no innovation in the future, and there will be no incentives to do better. This industry must maintain full competition.

There are also concerns that the booming of consumer finance asset securitization in China is a replica of the US subprime mortgage crisis, and this fear is not necessary. Asset securitization is a kind of financial innovation. It is worth encouraging because credit companies do not have unlimited loanable funds. If more young people are to borrow money, they need financial innovations including ABS to amplify the source of funds and increase Financing channels. The total amount of consumer finance is still small, and despite have some risks, it is still controllable. In China, financial innovation is not overdone, but not enough.