With the increase in the number of small, medium and micro enterprises, the demand for private credit is also expanding. As an important form of private finance in China, the private credit business has to a certain extent made up for the lack of bank capital supply and is an indispensable driver of economic growth. However, there are also many problems with private credit, and failure to address these existing problems will pose a great threat to the existing capital market in China. It is therefore a matter of urgent research to identify the root causes of the problems of private credit, so that corresponding countermeasures can be put forward to solve them.Through the comparison and analysis of the current situation of private lending in China and abroad, this paper summarises the problems and the directions that can be learnt from private credit in China. By analysing the game-like income between private capital, banks and owners of SMEs, it is concluded that the main reason for the problems of the phenomenon of private lending in China is the adoption of a dual-track interest rate system. The dual-track interest rate system has created huge risks for SMEs and the market. Therefore, it is necessary to set standardised interest rates, reform and improve the financial system to fundamentally solve the problems in China's private credit and promote the healthy development of our economy and market.

Ziqing Zheng, Xinxue Dong. A Study on the Development Status of Private Credit in China and Countermeasures Summary. Academic Journal of Business & Management (2023) Vol. 5, Issue 12: 61-67. https://doi.org/10.25236/AJBM.2023.051209.

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