The total profit of Russian microfinance organizations (MFIs) at the end of 9 months decreased by 8% and amounted to 36 billion rubles, a third of them operate at a loss. This is stated in the Review of key indicators of microfinance organizations prepared by the Bank of Russia. Regulatory changes are putting pressure on financial results.
Author:
https://rb.ru/author/strukova/
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Net profit decreased for 52% of companies compared to 2023, as follows from the Central Bank’s materials.
“The profitability of the industry has decreased. The proportion of unprofitable organizations was 34%. This contributes to greater concentration of the industry; The share of the 20 largest FMOs by assets has increased since the fourth quarter of 2022 and reached 57%,” says the study.
The size of the full cost of credit (FLC) in the largest segments remained stable under conditions of change in the structure of issuances towards longer-term loans. In the third quarter of 2024, the size of the PSC for short-term loans was 286% and for medium-term loans – from 280% to 284%.
In the third quarter, the growth of the MFO loan portfolio accelerated in conditions of high consumer demand (by 30% year-on-year) and reached 550 billion rubles. The proportion of overdue debt in MFO portfolios remains stable.
“MFIs are increasing income from additional activities, while regulatory restrictions are curbing interest income,” the study says.
In 2024, the Bank of Russia restricted the ability to provide loans to borrowers with a high debt load, which affected the work of microfinance organizations.
Author:
Ekaterina Strukova
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.
