The Bank of Russia proposed to introduce for microfinance organizations (MFIs) a standard for providing a loan to a person before repayment. This is stated in the Central Bank report after public discussions on the plan for the development of the microfinance market.
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The regulator also proposes to introduce the rule that a new loan cannot be obtained earlier than three days after the previous one has been repaid. In addition, it is proposed to reduce the amount of the maximum overpayment on consumer loans from 130 to 100% of the debt amount.
The measures are necessary due to the growth of credit debts among Russians, the Central Bank said. According to the regulator, a certain category of citizens has already become dependent on microfinance organizations: every month they receive several loans from different organizations, which increases their debt.
According to the results of a study published by the Central Bank, the most popular categories of expenses for loans obtained from microfinance organizations are food (23-45%) and purchases in supermarkets (20-30%). 20% obtain a loan from an MFI to pay off a debt from another microfinance organization, the Bank of Russia highlighted.
The regulator also announced plans to review the legislative framework applicable to MFOs in the next three years.
Author:
Kirill Bilyk
Source: RB
I am a professional journalist and content creator with extensive experience writing for news websites. I currently work as an author at Gadget Onus, where I specialize in covering hot news topics. My written pieces have been published on some of the biggest media outlets around the world, including The Guardian and BBC News.
