Banks and microfinance organizations (MFIs), when assessing the risks of borrowers, began to take into account the probability of personal bankruptcy of clients, Izvestia reported citing representatives of BKI and market participants. They believe this will lead to a decrease in the percentage of loan application approvals, so the number of denials could increase by 20 to 30%.
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The reason for these controls is the simplification of the bankruptcy procedure through the MFC, which has influenced the increase in the number of out-of-court bankruptcies, explained Alexey Volkov, marketing director of the National Bureau of Credit History (NBKI).
The expansion of the criteria led financial institutions to assume that this new circumstance could seriously affect existing credit processes in the future, he added.
The expected level of approval for applications from borrowers with a high risk of going bankrupt quickly may be 15% to 25% lower than that of ordinary customers, said Ion Boloboshencu, chief risk officer of the Eqvanta Group of Companies. At the same time, the overall decrease in the number of approved applications will most likely decrease by 20-30%, said Evgenia Lazareva, director of the project “For the rights of borrowers.”
- The bankruptcy procedure was simplified in 2020; Then it became possible to declare bankruptcy extrajudicially through the MFC, and in 2023 the criteria for simplified bankruptcy were expanded, which attracted even more citizens. Every year in Russia the number of personal bankruptcies increases on average by 2 times. Alexander Dokukin, founder and general director of the Center for Assistance to Credit Debtors, told RB.RU what bankruptcy is and how to legally write off your debts.
Author:
Karina Pardaeva
Source: RB
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