Russians turning to payday loans with 300% annual interest, Russian media outlet reports
Pravda Ukraine
Tighter lending requirements in banks are pushing more Russians to take out payday loans with interest rates as high as 292% annually.
Source: The Moscow Times, citing another Russian media outlet RBC
Details: In December, 70% of new loans were issued by microfinance organisations (MFOs), compared to 47.4% a year earlier.
The share of microloans in the overall credit structure has also grown significantly. In December, MFO products accounted for 13.6% of total loans issued in Russia, up from just 3.9% at the end of 2023.
Following Russia’s full-scale invasion of Ukraine, MFO loans reached 62.7% of all loans by number and 8.7% by volume. The Russian Central Bank reported that from January to September 2024, MFOs issued loans worth RUB 1.26 trillion (approximately US$12.8 billion), a 23.3% increase from the previous year.
Background:
- Consumer loan interest rates in Russian banks ranged from 25% to 38% annually at the beginning of November 2024. However, by 19 November, the maximum rate had risen to 44%.
- Meanwhile, Kremlin leader Vladimir Putin is reportedly increasingly concerned about the challenges facing Russia’s wartime economy, just as Donald Trump continues to push for an end to the war in Ukraine.
Support UP or become our patron!