Shadow Banking for Cash-Strapped Entrepreneurs: A Study of Private Lending Agreements Under Chinese Contract Law

摘要

This article discusses and analyses one of the most popular commercial contracts in China: the private lending agreement. It refers to moneylending arrangements between a business borrower and its debt investors. Millions of private businesses in China, having limited access to the state-dominated banking sector, rely on private financing to borrow funds. The market volume of the private lending sector amounts to CNY 4 trillion (US$580.6 billion). In 2014, there were 1.02 million private lending-related civil cases heard by Chinese courts.