The Guarantee Function of Floating Charge for Rural Financial Equity in China

Floating charge releases the use value and exchange value of property from the constrained fixed state, which is an institution design that can “activate” enterprise assets. The practice of floating charge in the financial transaction shows that floating charge can expand the guarantee scope of rural small and micro enterprises and farmers’ property, saving transaction costs, making full use of the future value of collateral and giving full play to the flexibility advantage of floating charge transaction. The floating charge institution has played an important social role since the Property Law of the People’ s Republic of China was formally introduced, then into the Civil Code of the People’ s Republic of China for restatement, which is mainly reflected in two aspects: first, the floating charge serves as the credit financial infrastructure to realize rural inclusive finance; second, the floating charge serves as an institutional trust mechanism to alleviate the information asymmetry between rural financing parties. Compared with the efficiency first of the floating charge in Anglo-American law system, the floating charge in the Chinese law system, combined with the financing practice of small and medium-sized enterprises and farmers in rural China, focuses on solving the rural financial exclusion and poverty of farmers’ financial rights, and emphasizes the value of financial equity, which leads to an obvious value shift, which is conducive to improving the financial tolerance of rural financial disadvantaged groups and promoting the legal realization of whole national financial equity.