Private microfinance is not illegal. Private microfinance is not usury, it is supervised and managed by regulatory agencies, and its lending rate is also within the scope of Hefei, which is not illegal. Private lending is a civil act, which is bound and protected by the Civil Code.

legal ground

Article 1 of Provisions of the Supreme People's Court on Several Issues Concerning the Application of Laws in the Trial of Private Lending Cases (revised in 2020).

The term "private lending" as mentioned in these Provisions refers to the financing behavior between natural persons, legal persons and unincorporated organizations.

These provisions shall not apply to financial institutions and their branches engaged in loan business established with the approval of the financial supervision department, as well as disputes arising from loans and other related financial businesses.