Abstract: Xiangxi Autonomous Prefecture is located in an underdeveloped area,with backward economy and bad environment for investment.It has been facing the difficulty for investment for a long time,and commercial banks have classified this prefecture as the highrisk lending area in succession,and refused to loan for small enterprises.Under such circumstances appeared private fundraising.For the last decade,the private fundraising in Xiangxi autonomous prefecture has gone through three periods of start,expansion and collapse.It is a process from legal fundraising to illegal fundraising.

Key words: Xiangxi Autonomous Prefecture, illegal fundraising, financial crisis, reason, process