Bank of Russia: Russians are actively switching to remote interaction with financial institutions

In 2018, more than half of the adult population of Russia (55.2%) used remote access to Bank accounts, and in 2017 the share of such citizens was 45.1%. The Bank of Russia conducted another measurement of financial accessibility indicators, noting the steady growth of the population's use of remote channels of access to financial services and non-cash payments. The regulator has been conducting such measurements since 2015 and annually notes the important role in improving financial accessibility in Russia of developing remote channels of access to financial services, as well as increasing the speed of access to them.

42.8 per cent of the adult population of respondents who do not use remote services on a regular basis reported a willingness to start using remote access to financial services (if possible), as in the previous measurement. At the same time, the share of non-cash payments (including using payment cards) for goods (works, services) in the total volume of retail trade and paid services to the population increased by 8.2 percentage points (to 55.6%).

At the same time, in 2018, there was a reduction in the number of units of existing credit institutions – from 35 494 to 31 752 units. And if in previous years the decline in this indicator occurred from year to year at a slower pace (11.9% in 2015, 8.7% in 2016 and 3.4% in 2017), in 2018 the rate of decline increased and amounted to 10.5%. The tendency to reduce the traditional formats of banking units corresponds to the global practice and is primarily associated with the development of modern remote methods of customer service. This practice is fully justified in cities and large settlements. However, in rural areas, remote, sparsely populated and hard-to-reach areas with underdeveloped information and communication infrastructure, this approach does not provide the necessary level of availability of financial services, and therefore in 2018, some large credit institutions, reducing their presence in Russian cities, did not close units in rural areas.

In addition, banks used a new format, different from traditional branches and internal structural units. According to the results held by the Bank of Russia special continuous survey of credit institutions in Russia on 31 December 2018, there were more than 27 thousand remote points of service with employees of credit organizations and more than 196 thousand remote points of service with their agents (excluding banks Bank payment agents). Also, as of the end of 2018, separate banking operations for making transfers, withdrawing and depositing cash were possible in more than 30 thousand post offices (the growth rate for the year – 103.9%), which was approximately 75% of all operating post offices. In 15 thousand offices it is also possible to receive documents for opening an account (the growth rate for the year – 47.6%).

When analyzing the quality of service in financial institutions, the study noted an increase of 8.2 percentage points (from 65.0 to 73.2%) in the proportion of adults who believe that when applying for a loan in the last 12 months, they were provided with reliable, understandable and sufficient information about the product. Over the year, the share of adults with active loans in credit or non-credit financial institutions (NFO) increased by 1.3 percentage points (from 26.8 to 28.1%), while the growth rate of principal debt in these types of organizations was 22.5% (from 12,342 billion to 15,114 billion rubles). At the same time, overdue debts of individuals to credit institutions decreased by 10.5% (from 849 billion to 760 billion rubles).

In 2018, the share of SMEs with active loans in credit or non-credit financial institutions increased by 7 percentage points (from 18.4 to 25.4%) compared to 2017, with the growth rate of loans equal to 11.4% (from 6151 billion to 6855 billion rubles) and principal debt 1.1% (from 4209 billion to 4257 billion rubles).

The size of SME debt on Bank loans for the first time since 2014 showed growth at the end of the year, and the volume of loans issued in 2018 was the highest since 2015. The market was supported by a significant reduction in interest rates on SME loans in 2018: weighted average rates on SME loans for up to 1 year decreased by 1.32 percentage points (from 12.46% in January 2018 to 11.14% in January 2019), and rates over 1 year – by 0.49 percentage points (from 11.28 to 10.79%, respectively). In turn, the overdue debt of SMEs to banks decreased by 16.2% (from 622.7 billion to 521.8 billion rubles).

Source: Bank of Russia press service.

Deputy Finance Minister Alexei Moiseev: "Microfinance institutions should migrate to the area of banks with a basic license in the next ten years»

Microfinance institutions in the next ten years should move into the category of banks with a basic license. This opinion was expressed in an interview with TASS Deputy Finance Minister Alexei Moiseev.

"We must exclude gray and black microfinance organizations. I believe that microfinance institutions should gradually, in the next ten years, migrate to the area of banks with a basic license. Existing now "olubanke and Ned bank" — a very strange thing, as in protecting the savings we subside. They can raise funds of citizens, but the money is not insured. And we now have such a regulatory "mess" - MFIs write the terms of the contract in a small font, we force them to write large, all these small changes are wound one on the other. And by and large, we just need to bring together the regulation of MFIs and banks. But it will work only if we introduce such severe penalties for unlicensed lending activities on the part of MFIs not included in the register, as is the case with banks. This should be equated at the level of the administrative and criminal code to the conduct of illegal business, as it works for banks, «said Alexey Moiseev.

Source: TASS (https://tass.ru/interviews/6022406)

The Resolution of the government of the Russian Federation on features of disclosure of information on shareholders of IFC is published.

On the official Internet portal of legal information published a Decree of the Government of the Russian Federation from 21.08.2019 No. 1073 "On the disclosure of information subject to disclosure in accordance with part 6 of article 4-3, paragraph 5 and paragraph 2 of article 9 of the Federal law "On microfinance activities and microfinance organizations".

Under the document:

  1. Micro financial company has the right to disclose in limited composition and (or) volume of information about the structure and composition of its shareholders (participants), including persons under the control or significant influence of which is micro financial company, in the case of actions against these persons restrictive measures imposed by foreign States, state associations and (or) unions and (or) state (interstate) institutions of foreign States or state associations and (or) unions.

  2. Micro financial organization has the right to perform disclosure in limited structure and (or) volume of information on the persons rendering essential (direct or indirect) influence on the decisions made by governing bodies of micro financial organization in the order established by constituent documents in case of action concerning the specified persons of the measures of restrictive character entered by the foreign States, state associations and (or) unions and (or) state (interstate) institutions of foreign States or state associations and (or) unions.

    Source: http://publication.pravo.gov.ru/Document/View/0001201908230023

Check the business reputation and the right to work in the financial market is now possible on the portal of public Services

The Bank of Russia has started providing new services in the Federal state information system "Unified portal of state and municipal services (functions)" (EPSU) to reduce administrative barriers and improve services of electronic interaction with stakeholders. Information on the presence or absence of information about themselves in the databases of the Bank of Russia on business reputation, the maintenance of which is provided by articles 75 and 76.7 of the Federal law of 10.07.2002 № 86-FZ "on the Central Bank of the Russian Federation (Bank of Russia)", the applicants can now get online. To do this, applicants with a confirmed EPSU account must make a request on the relevant page of the public Services portal. The answer to the applicant will be generated automatically. Previously, to obtain this information, the applicant had to send a written request to the Bank of Russia with copies of the necessary documents confirming his identity, and the answer was provided after consideration of the request and only on paper.

In addition, market participants had the opportunity to check on the EPSU whether the person of interest (for example, a counterparty) has the right to operate in the financial market. This can be done by obtaining an extract from the registers of financial market participants.

Source: Bank of Russia press service. (http://www.cbr.ru/Press/event/?id=2792)

MFI market: Main trends of the first quarter 2019

Key indicators of the microfinance institutions market showed growth in the first quarter of 2019 compared to the same period last year. The portfolio of microloans increased by 45% to 173.6 billion rubles, the volume of quarterly issuance increased by 33.7% to 93.8 billion rubles, according to the information and analytical material "Trends in the microfinance market".

The main event in the microcredit market was the entry into force of the law providing for the reduction of the debt burden of the borrower. In particular, since January 28, the daily interest rate on the loan may not exceed 1.5%, and the maximum amount of payment for the use of the loan (interest, penalties, additional services, and so on) – two and a half sizes of the loan.

Gradual growth of market concentration and digitalization continued in the first quarter. Against the background of the overall reduction of separate divisions of MFIs, there was an increase in online issuance. Active development of the online segment provided by reducing the number of offices to ensure the availability of microloans for consumers.

During 2018, the share of overdue debt (NPL 90+) did not exceed the peak value of 2017 and slightly decreased by the end of the first quarter of 2019 (to 25%). There is a tendency to change the model of work with overdue debts-due to the gradual "consolidation" of the market, more companies begin to work independently with arrears.

The full impact of restrictions on the activities of MFIs aimed at limiting the debt burden of borrowers, at the end of the first quarter did not manifest itself, since part of the total portfolio in this period consisted of loans issued taking into account the previously existing restrictions and rules of work. Nevertheless, the decrease in interest rates in the PDL segment has already begun to affect the amount of interest income collected – despite the increase in the volume of issues, the volume of revenue in the PDL segment remained at the level of the previous quarter.

Source: Bank of Russia press service. (http://www.cbr.ru/Press/event/?id=2755)

http://www.cbr.ru/Content/Document/File/73362/Inf_note_jul_1719.pdf

Reputation and qualifications requirements: what is changing for microfinance company owners, managers and officers from 2018

On January 28, 2018, new requirements for the business reputation of purchasers (owners) of large blocks of shares (shares), management bodies and officials of banks, insurance companies, NPFs, management companies and microfinance companies came into force. These innovations contained in the Federal law No. 281-FZ of 29.07.2017. The Bank of Russia will apply a cross-functional approach in assessing compliance with the established requirements for the business reputation of these persons, as well as in cases adopted by law – candidates for senior positions in these companies and banks.

The main novelties of Federal law No. 281-FZ are analyzed in detail in the presentation posted on the website of the Bank of Russia.

Now, for all the above-mentioned financial market participants, the requirements for the procedure for acquiring large (more than 10%) stakes (shares) and establishing control over large shareholders (participants), as well as for the procedure for disclosing information about shareholders (participants) and the ownership structure are essentially aligned. The procedure of elimination of violations concerning requirements to business reputation is regulated.

In accordance with the act, a person has the right to request the Bank of Russia information on the availability of information in the database maintained in accordance with articles 75 and 76.7 of the Federal law "On the Central Bank of the Russian Federation (Bank of Russia)" and to appeal in the Bank of Russia in the established order the decision on the recognition of its business reputation or qualifications unsatisfactory. After consideration of the issue by the Bank of Russia, a person has the right to appeal to the court against decisions concerning his business reputation or qualifications.

The Bank of Russia already maintains a database in accordance with the procedure established by it, which includes information on persons whose business reputation is recognized as not meeting the requirements of the legislation. In total as of January 1, 2018 data on 5795 persons holding positions in credit and non-credit financial organizations or being owners of large blocks of shares (shares) of credit organizations (controllers of such owners) whose business reputation does not meet the requirements established by the legislation are entered into the database.

The law provides for the possibility of a" lifetime " ban on holding positions, holding shares (shares), exercising control over shareholders (participants), but this applies only to credit institutions and solely on two grounds: bringing a person in accordance with a legally effective judicial act to criminal liability for unlawful actions in the bankruptcy of a credit institution, intentional and (or) fictitious bankruptcy of a credit institution; as well as repeated violation of the requirements for business reputation. This law is aimed at making the work of the governing bodies of banks and financial companies more responsible and professional. In addition, innovations will contribute to the eradication of unfair competition in financial markets.

Source: press service of the Bank of Russia http://www.cbr.ru/Press/event/?id=1632

Elvira Nabiullina: "in no case should microfinance be Banned in Russia"

"Somewhere it was discussed that it is necessary to ban, in principle, microfinance. In our opinion, it is impossible to prohibit it in any case, because then people will fall into the hands of illegal, "black" creditors," - said the Chairman of the Bank of Russia Elvira Nabiullina during the discussion of the annual report of the Central Bank for 2018 at a joint meeting of the Committee on the financial market And the Committee on budget and taxes.

According to her, the Bank of Russia understands that "people do not turn to microloans from a good life, often in order to maintain the level of consumption from paycheck to paycheck."

"We are tightening regulation, we withdraw from the market, we continue to withdraw unscrupulous players, that is, weak players, by law, we limit the cost of a microloan," Elvira Nabiullina reminded.

She assured that work in this direction will be continued. "Here we also intend to strengthen our work on interaction with law enforcement agencies. And here we ask for your support, including blocking sites that advertise the activities of such illegal creditors," - said the Chairman of the Bank of Russia.

Source: RIA Novosti (https://ria.ru/20190523/1554831320.html)

The Bank of Russia approved the basic standard for MFI transactions in the financial market

The basic standard establishes the conditions, procedure and basic principles of the transactions on granting of microloans and the involvement of microfinance institutions (MFIs) in cash to individuals.

In particular, the MFI must inform the borrower as fully and in detail as possible about the terms of the contract, and if the terms of the loan involve the conclusion of an insurance contract – provide the borrower with information about the insurance company, the subject of the contract, the insurance cases and exceptions provided for in the contract, insurance premiums, If a microfinance institution transfers the right to assign a loan claim to another person, according to the standard, it is obliged to notify the borrower within 15 days.

In addition, the basic standard provides requirements for the procedure for assessing the solvency of the recipient of financial services – such an assessment is mandatory and includes not only the analysis of documents submitted by a potential borrower, but also obtaining information about it from other sources (for example, credit bureaus).

Also, the basic standard establishes requirements for the content of contracts to raise funds of individuals and internal documents of MFIs. MFIs attracting funds from individuals must publish on their official website financial statements for the last 5 years, information on material facts, information on insurance contracts (if any). These requirements of the basic standard come into force on July 1, 2018.

And from July 1, 2019, MFIs will also be required to use a QR code with links to resources on the Internet that contain the necessary information for recipients of financial services.

The basic standard was developed by self-regulatory organizations in the financial market, uniting MFIs (SRO MFIs), in accordance with the requirements of the Bank of Russia. The standard will be binding on all MFIs regardless of their membership in the SRO of MFIs. The application of this basic standard will contribute to improving the quality of financial services provided by MFIs (establishment of a single sequence of actions for all MFIs in transactions), increase the transparency of MFIs activities for both regulatory authorities and consumers of MFIs services.

Source: press service of the Bank of Russia (http://www.cbr.ru/Press/event/?id=1802)

Results of 2018 in the MFI market: growth of the portfolio of medium-term loans, development of the online segment

In 2018, the portfolio of microfinance institutions grew by 45% and amounted to 163.6 billion rubles. The number of existing contracts increased by a comparable 44% - up to 9.4 million units, according to the information and analytical material "Trends in the microfinance market, 2018".

The growth of the total portfolio of microloans occurs with a reduction in the number of MFIs (-12% for 2018), which on January 1, 2019 amounted to 2002 companies (53 IFC and 1949 IFC). This trend is due to the work of the Bank of Russia to improve the financial market and the withdrawal of unscrupulous and inactive players: the market remains the most stable organizations that comply with the rules of work and meet the requirements and restrictions established by law.

The development of the market in 2018 took place against the background of adaptation to previously introduced regulatory requirements aimed at improving the stability of companies, restraining the growth of the PDL segment and protecting consumers from excessive debt burden. For 2018 had the end of the transition period for redundancy, the tightening of provisions upon the occurrence of delay on PDL-loans (100% in 91 days), the introduction of a multiplying factor of 10% for PDL-loans (subject to calculation of capital adequacy) and the preparation for the new restrictions limit the borrower's debt.

The market growth driver remains the demand for microfinance products from individuals: the growth of the loan portfolio in this segment for the 12 months of 2018 amounted to 51% (including due to the growing demand for POS-microloans), while the share of consumer loans in the structure of the total portfolio of MFIs increased to 82%. The development of the segment in 2018 was mainly due to medium-term consumer microloans( Installments): the corresponding portfolio for 12 months increased by more than half (+ 52%).

In 2018, the online loans segment continued to develop: this portfolio doubled in 12 months to RUB 31.6 billion and accounted for 19% of the total MFI portfolio. The growth in the volume of online loans is also due to the transition to the online format of a number of companies in order to reduce costs and adapt business to the restrictions of the daily interest rate and the maximum debt of the borrower introduced from the beginning of 2019.

Despite the active growth of the MFI portfolio, the share of overdue loans (NLP 90+) during 2018 remained at the level of 22.5–26.5%, which corresponded to the values of 2017. The total net profit on the MFI market in 2018 amounted to 10.87 billion rubles.

Source: Bank of Russia press service (http://www.cbr.ru/Press/event/?id=2578)

The Bank of Russia begins to publish on its website information about the requirements for participants in the microfinance market.

The Bank of Russia has posted on its website data on the current regulations prohibiting the participants of the microfinance market (credit consumer cooperatives, agricultural credit consumer cooperatives, housing savings cooperatives, microfinance companies) to carry out certain types of operations – in particular, to raise funds and to issue loans. In the future, it is planned to publish information on the requirements as they are issued and removed from control.

Orders are issued when violations of Federal laws and regulations of the Bank of Russia are detected. Removal of instructions from control is carried out at elimination of the reasons which were the basis for their removal.

Information about the regulations will be posted on the website of the regulator in the section "Financial markets" in order to prevent further illegal or high-risk activities of the financial institution, which may lead to violation of consumer rights.

At the same time, it is important to note that the prohibitions established by the regulations do not apply to other activities of the microfinance market participants, and therefore cannot prevent the return of funds under loan agreements and personal savings transfer agreements.

Source: Bank of Russia press service

http://www.cbr.ru/finmarket/rbr/?UniDbQuery.Posted=True&UniDbQuery.Market=3&UniDbQuery.SegmentSelect=38

http://www.cbr.ru/Press/event/?id=2435

The Bank of Russia puts a barrier to unfair actions in the financial market

Based on the analysis of international and Russian experience, the regulator formulated proposals to combat negative and illegal phenomena that violate the principles of business ethics and business conduct, including abuse of law and unfair practices in the financial market.

The Bank of Russia's concept of combating unfair practices in the financial market covers relations in the insurance and microfinance markets, in the field of collective investment and trust management, as well as in the securities market. The document notes that mass abuses are allowed by unscrupulous consumers of financial products or their representatives, as well as by non-credit financial organizations themselves in the face of disloyal managers and dishonest intermediaries.

The identification, disclosure and investigation of offences in sphere of the financial market is complicated, on the one hand, their mnogoopytny character, using intricate methods of making, using transnational remittances, a large number of participants and the solidarity of criminal groups, and on the other imperfect provisions of the law, the duration of provision of international legal assistance requests to law enforcement and the need to enhance law enforcement officers special knowledge about the individual segments of the financial market.

The business protection system should be able not only to withstand constantly changing external and internal threats, but also to comprehensively neutralize their sources. To this end, the developers of the concept formed a short list of negative factors that contribute to the Commission of unseemly actions, as well as proposed measures for the basic directions of countering the sources of threats to the development of the financial market.

The approaches proposed by the Bank of Russia are aimed at protecting the rights and legitimate interests of bona fide consumers of financial services, reducing the losses of financial institutions from unfair actions, improving the infrastructure for detecting improper actions, developing the financial market and ensuring the stability of the financial system.

Taking into account the diversity of activities and the range of services provided by non-credit financial institutions, anti-fraud mechanisms based on unified recommendations should be adapted to the peculiarities of the market and take into account the specifics of the business profiles of its professional participants, taking into account the risks affecting the activities of specific financial institutions. The Bank of Russia expects a prompt and constructive response from the market to form a roadmap for implementing the provisions of the concept.

Source: Bank of Russia press service

http://files.rmcenter.ru/year/2018/10/BankRossii_Konzepziya_oktyabr2018.pdf

http://www.cbr.ru/Press/event/?id=2213

The Bank of Russia has sent the President and the Government the Main directions of development of the financial market for 2019-2021

The Bank of Russia has completed a public discussion of the draft Guidelines for the development of the financial market of the Russian Federation for the period 2019-2021 and sent an updated document to the Government of the Russian Federation, the President of the Russian Federation, the State Duma of the Federal Assembly of the Russian Federation and the national financial Council.

The discussion of the first version of the Main directions took place from June to September 2018 in the North-Western, Central, southern, North Caucasus, Volga, Ural, Siberian and far Eastern Federal districts. The meetings organized by the regulator were attended by about 3 thousand representatives of financial institutions. The Bank of Russia received more than 300 letters with comments and suggestions on the draft document.

Most often, market participants proposed to specify the activities stated in the document – to improve financial accessibility and literacy, protection of the rights of consumers and financial service providers.

Particular attention was paid to the need to increase the volume of long-term financial resources in the economy, the development of insurance and microfinance markets and the digitalization of the financial market.

A significant part of the proposals for the development of the microfinance market, received by mail and during meetings organized by territorial institutions of the Bank of Russia, concerned the problems of credit consumer cooperatives, agricultural credit consumer cooperatives, pawnshops and microfinance organizations. In particular, they proposed to include in the draft guidelines measures to reduce the regulatory burden and the volume of reporting, to expand the volume of services allowed to be provided and to ensure competitiveness in relation to other financial institutions

Another important note to the first version of the draft was the need to Supplement the document with quantitative indicators of efficiency, allowing to track the quality of implementation of measures of the Main directions of development of the financial market of the Russian Federation for the period 2016-2018. In addition, among the proposals - the need to prioritize measures to increase the availability of financial resources for small and medium-sized businesses.

A significant part of the comments was taken into account in the new version of the document.

The draft of the Main directions of development of the financial market of the Russian Federation for the period 2019-2021 (http://files.rmcenter.ru/year/2018/10/Osnovnienapravleniyarazvitiya.pdf)

The main results of the public discussion http://files.rmcenter.ru/year/2018/10/Itogi_obsujzdeniy_BankRossii.pdf

The Bank of Russia plans to approve the final version of the document and its action plan (roadmap) in late 2018 – early 2019.

According to the press service of the Bank of Russia (http://www.cbr.ru/Press/event/?id=2187)

"Review of key indicators of microfinance institutions No. 1". Information and analytical material of the Bank of Russia for the first quarter of 2019

In the first quarter of 2019, the continued growth of microfinance institutions (MFIs) portfolios was accompanied by a shift in the supply and demand balance in favor of a slight increase in the share of short-term loans. It is currently not possible to assess the impact of regulatory restrictions on PDL borrowing rates in the longer term, as the new rules are only in effect for a few months.

Also in the reporting quarter, there was a decrease in the share of investments in the IFC by individuals who are not founders, and a simultaneous increase in debt Bank financing in General for the IFC.

The portfolio of microloans in the first quarter of 2019 increased by 6% to 174 billion rubles. The share of loans to individuals in the portfolio structure remained at the level of 82% at the end of the quarter. The share of PDL2 segment loans for the quarter increased from 23 to 24% of the total portfolio, the share of THIS segment in the volume of loans issued during the quarter amounted to 46%.

MFIs continue to actively develop digital sales channels – the share of online loans in the structure of loans increased to 34% in monetary terms and to 49% in quantitative terms. Most of them were in the PDL segment.

The average loan to individuals decreased from RUB 10.8 thousand in the fourth quarter of 2018 to RUB 10.3 thousand in the first quarter of 2019.

MFIs are gradually changing the model of dealing with overdue debts, more evenly distributing the sale of debt during the year and giving preference to independent work with overdue debts. The share of overdue debt in the total portfolio decreased (NPL 90+3 decreased from 26.5% to 25.1% in the quarter), and the share of written-off debt increased from 0.4% to 0.7%.

MFIs retain sufficient capital stock in anticipation of the reduction of the cap size of the UCS and other regulatory innovations. Compared to the value of the first quarter of 2018, net profit in the market as a whole increased by 4 times, and capital by 30% in the first quarter of 2019. The average ROE for MFIs was 18.5%. Median capital adequacy ratios remain well above minimum acceptable levels.

The average size of investments by natural person or individual entrepreneur, attracted by IFC (including investments of founders, participants, shareholders) rose to 4 million rubles (+54% yoy), attracted the ICC (investment of founders, participants, shareholders) – to 3.2 mln (+209% yoy).

These data are shown in the information-analytical material of Bank of Russia "an overview of the key indicators of microfinance institutions No. 1", prepared for the first quarter of 2019, based on data reporting provided as 25.06.2019.

The online lending sector is growing seven times faster than the banking market

The sector of alternative online lending is growing seven times faster than the banking market, according to a study by the United Credit Bureau (OKB).

The study was based on financial indicators of alternative lending markets and the banking sector — cash loans up to 100 thousand rubles for 2017 and 2016.

At the end of 2017, online companies issued 30.3 billion rubles, which is 67% more than a year earlier. For 11 months of 2017, banks issued about 11.93 million cash loans worth more than 423.4 billion rubles, which is 9% more than in the same period of 2016. This trend is likely to continue at the end of 2017.

The average loan amount in the online lending segment is increasing. In 2017, it amounted to 13,800 rubles, which is 13% more than in 2016. The average check in the banking sector increased only by 3% - to 35 500 rubles.

"Banks today retain quite strict requirements for potential borrowers and prefer to work with their trusted customers, offering them large cash loans and credit cards. Nevertheless, the need of the population for borrowed funds is not reduced — - said Nikolai Myasnikov, Deputy General Director of the design Bureau. — This is why many borrowers who need small amounts of cash are increasingly turning to online lending companies. These companies are more loyal to borrowers, and the process of lending takes place online, which certainly makes it more convenient for the consumer."

According to the press service of the Bank of Russia

https://www.cbr.ru/Content/Document/File/73687/review_mfi_19Q1.pdf

New and old MFI clients ask for different amounts of loans

The amount of loans requested by clients of microfinance institutions is increasing. During the year, the average size of the requested loan increased from 7800 to 10100 rubles. And March showed a significant increase to the results of March 2018: +31.4%.

According to experts, the growth of the required loan amount is influenced by several factors. Among them, for example, inflation, increased spending. But in addition, the share of young people among MFI clients is increasing. In 2018, among those applying for loan approval, the youth under 30 was 53.5%.

Young people – the most consumer-active stratum of the population. Therefore, the increase in the number of such clients leads to an increase in the average amount of the requested loan: the needs of this group are much greater.

It is interesting that requests from new and regular MFI clients are very different. New customers request amounts that are, on average, 1.8 times larger than regular customers. This difference indicates an increase in the level of financial literacy of regular customers of MFIs: when requesting a re-loan, they carefully calculate their debt burden and take into account the need for new loans in the future, which are unlikely to encourage in the presence of outstanding loans.

The new conditions of the microfinance market, established by law, increased the rating of MFIs among clients

Lower interest rates and the maximum amount of interest on loans increased the number of new clients in the microfinance sector. In the two months of this year, there was an increase in the average daily number of applications for quick loans.

In February, the number of applications increased by 14.4% compared to the previous month, and the average daily number of applications issued in February increased by 16.2% compared to January.

Market experts believe that the innovations in the legislation on the activities of MFIs have opened this sector to new customers who have not resorted to the services of MFIs before, and now find the conditions of MFIs attractive.

The increased interest in MFI products became visible from January 28. The growth has continued since then, with applications up 11.7% from the same period in February through March 11.

Experts believe that further cuts in rates and interest limits twice-July 1, 2019 and January 1, 2020-will also contribute to an increase in the customer base of MFIs

Experts predict a rise in online micro-credit in 2019

23.5% of customers of online loan services are young people from 18 to 25 years. Over the past year, this segment of borrowers has increased its share of presence by 3.5% and set a record for the past 5 years.

Experts associate the growth of a young group of borrowers with the development of technologies in the distribution of financial products. The younger generation prefers to receive services remotely, as a good command of electronic means of communication. At the same time, borrowers of this age often have to face rejection from banks that prefer not to deal with borrowers without a credit history.

The number of customers aged 26 to 30 in online loans has not changed in 2 years and was slightly below 25%. The number of remote borrowers aged 31 to 35 years decreased by 1.4%, now online borrowers of this age are 21%. But the age of 55+ raised its share of online loans by 1% in 2018 to 3.6%.

Almost 70% of customers services, online micro-credit under the age of 35 years.

At the same time, the situation in the banking segment is different. Clients under 30 years are only 19% of the total number of borrowers included in the statistics for 2018. This age group slightly lost ground, by 0.3%. The percentage of customers aged 31-50 increased by 2.1% to 52.3%. But there were 1.7% fewer customers over the age of 50 (28.8% of the total). Clients under 40 years of age make up the main sector of the banks ' client base (49%).

In the new 2019, online microcredit services predict an increase in customers, as rates on offers are significantly reduced (to 1.5% per day from January and to 1% per day from July this year).

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