Consumer finance companies are non-bank financial institutions. Microfinance companies are limited liability companies or joint stock companies engaged in microfinance business.

2. Different operating characteristics

The loan interest rate of microfinance companies is higher than that of financial institutions, but lower than the average interest rate of private loans. In terms of loan methods, the Guiding Opinions on the Pilot Project of Small Loan Companies stipulates that the contract contents such as loan term and loan repayment term shall be determined by both borrowers and lenders through consultation in accordance with the principle of fairness and voluntariness. Small loan companies take credit loans, secured loans, mortgage loans and pledged loans.

In terms of loan targets, microfinance companies adhere to the principle of "small amount and dispersion", encourage microfinance companies to provide credit services for farmers and small enterprises, and strive to expand the number of customers and service coverage. In terms of loan term, the loan term of a microfinance company is determined through fair and voluntary negotiation between the borrower and the lender.

Consumer finance companies can apply for consumer loans such as home appliances, tourism and weddings. The loan amount shall not exceed 5 times of the monthly income, and the interest rate shall be up to 4 times; The repayment period is as long as one year without guarantee.

3. Different operating principles.

The name of a consumer finance company shall be marked with the words "consumer finance". Without the approval of the CBRC, no institution may use the word "consumer finance" in its name. Banking supervision institutions shall supervise and manage consumer finance companies and their business activities according to law.

Investors of consumer finance companies shall be legal persons established in China and abroad according to law, which are divided into major investors and general investors. The main investor refers to the investor who contributes the most and whose contribution is not less than 30% of the total share capital of the proposed consumer finance company. Ordinary investors refer to investors other than major investors.

Small loan companies should establish a salary distribution system and a positive incentive and restraint mechanism suitable for their own business characteristics and scale, and cultivate a corporate culture suitable for local rural economic development. Small loan companies choose their own loan targets under the principle of serving farmers, agriculture and rural economic development. Small loan companies should establish a credit mechanism suitable for their own business development and reasonably determine the credit lines of different borrowers.

Small loan companies should establish and improve the loan management system, clarify the business processes and operational norms such as pre-loan investigation, in-loan review and post-loan inspection, and effectively strengthen loan management. Small loan companies shall, in accordance with the relevant provisions of the state, ensure that the asset loss reserve adequacy ratio is always above 100%, fully cover risks, write off bad debts in time, and truly reflect the operating results.

Small loan companies should establish a commitment system for promoters and shareholders. Small loan companies shall establish an information disclosure system, and timely disclose information such as annual operation and major events. Small loan companies shall not absorb social deposits or engage in any form of illegal fund-raising.

Baidu encyclopedia-micro-credit company

Baidu encyclopedia-consumer finance company