In the Interim Provisions on the Administration of Loan Companies (Yin Jian Fa [2007] No.6), the CBRC defines loan companies as "non-bank financial institutions" established by domestic commercial banks or rural cooperative banks in rural areas in accordance with relevant laws and regulations and approved by the CBRC to provide loan services to farmers, agriculture and rural economic development in the county. But obviously, microfinance companies are not "loan companies". The reason is that according to the Guiding Opinions, a microfinance company is an enterprise legal person approved by the local government, invested by natural persons, enterprise legal persons and other social organizations, and registered in the administrative department for industry and commerce. Moreover, microfinance companies have neither obtained the financial institution license issued by the CBRC nor been supervised by the CBRC. Therefore, microfinance companies are neither banking financial institutions nor non-banking financial institutions, but only non-financial enterprises with special financial business (loan business). This ambiguity in identity directly leads to the dilemma of loan and mortgage management of microfinance companies.

Legal objectivity:

Article 7 of the Company Law A company established according to law shall be issued a business license by the company registration authority. The date of issuance of the business license of the company is the date of establishment of the company. The company's business license shall specify the company's name, domicile, registered capital, business scope, name of legal representative and other matters. Where the matters recorded in the company's business license change, the company shall register the change according to law, and the company registration authority shall issue a new business license.