Borrowers toil without debt – Kommersant

Microfinance organizations (MFIs) faced a 3-6% decline in demand for loans ahead of the May holidays. This is due both to the savings behavior of borrowers and to more frequent refusals against the backdrop of regulatory tightening. So far, the general trend in the market is aimed at lengthening the terms of issuance while maintaining the loan amount, which allows you to “spread out” the client’s debt load. But from July, the market will have to reconfigure the product line to reduce the maximum rate on loans from 1% per day to 0.8%.

MFIs are seeing a decrease in demand for microloans on the eve of the May holidays, although traditionally, except for the crisis year of 2022 (then in the spring months, the drop in demand for loans reached 35%). Previously, the end of April was one of the peak seasons for the microfinance segment as Russians prepare for the long weekend. “The activity of borrowers has decreased due to high uncertainty in the economy, as well as due to the tightening of scoring in response to the entry into force of macroprudential limits that oblige MFIs to more carefully check their borrowers (see Kommersant on March 30),” explains the CEO of the MCC Creditter Igor Smirnov.

For example, the Lime-Zym company said that in the period from April 24 to April 30, 2023, 49.4 thousand applications for microloans were submitted, which is 6% lower than in the period from March 24 to March 30. For comparison, in 2021, growth over the same period was 11%, notes Olesya Kisileva, Managing Director of Lime-Zym. In addition, before taking new loans, borrowers decided to pay off the old ones: in the last days of April, the volume of repayments increased by 12% compared to the same period in March, Ms. Kisileva notes. “On average, every third loan that receives regular payments is repaid ahead of schedule,” confirms SRO MiR.

A decrease or at least a slowdown in demand is also confirmed in other companies. The volume of loans, however, is still growing, but in April this year the dynamics is slightly lower than a year earlier, says Andrey Ponomarev, CEO of Webbankir: 3.4% in April this year against 5.2% a year earlier. The number of applications before the May holidays decreased by 5% compared to last year, says Andrey Greznev, Marketing Director at MoneyMan.

In the last days of April 2023, the number of loan applications was 3% less, confirms Ion Bolobosencu, Risk Director at Eqvanta Group. “Against the background of the transition to a savings model of behavior, Russians are trying to minimize spending on secondary needs, which include holiday expenses,” he believes.

Despite the decline in the number of applications, the volume of loans for the last week of April increased by 14%, Lime-Zym notes. This is due to the growth of the average loan check, the company explains. The most noticeable growth was shown by the issuance of medium-term loans. This lending approach allows companies to maintain an acceptable level of approval while still complying with regulatory requirements for the proportion of highly leveraged borrowers.

“Medium-term loans help to reduce the debt burden of clients. For example, let’s take two clients with the same PDN level. One of them takes a payday loan for 20-25 days and the amount of 7 thousand rubles, and the second – a medium-term loan for 2-3 months and 15 thousand rubles, – explains Olesya Kisileva. – Monthly debt load of the second client will be lower (the calculation of PTI is carried out precisely as a share in the average monthly income.— “b”), since he repays the debt in installments.

However, long-term products are offered only to the most trustworthy segment of customers with a good credit history, both inside and outside the company, says Ion Bolobosencu. “This way it is possible to minimize the level of possible losses from potential socio-economic fluctuations. That is why in a crisis, long-term loans are the first thing lenders limit,” he explains. The final level of delinquency for medium-term loans is approximately 3-4 percentage points higher than for short-term loans, admits Olesya Kisileva.

“The general trend for MFIs now is an increase in the average term with the same microloan amount. According to the Bank of Russia, the average check in retail microloans is about 13 thousand rubles. (it has not been indexed for two years),” adds Ivan Uklein, director of banking ratings at Expert RA. The upcoming limitation of the marginal rate from 365% to 292% per annum from July 1, he believes, will require “another fine-tuning of the MFI product line.”

Polina Trifonova