Small loan companies operating without authorization face legal challenges and scrutiny.
Small loan companies are facing legal issues because they are not officially authorized to provide loan services. The guidelines set by the China Banking Regulatory Commission and Central Bank define these companies as enterprise corporations, but they are actually offering financial services. This confusion in their legal status makes it difficult to apply laws, establish proper procedures, and supervise them effectively. To address this problem, it is suggested that the laws be revised to classify these companies as financial institutions.