Fewer loans in one hand – Newspaper Kommersant No. 11 (7456) dated 01/23/2023

Despite the seasonal increase in the number of active microloans per client in December last year, this figure was lower than in 2021. Companies in the microfinance sector are trying to reduce the risk of clients leaving in arrears. It is not worth expecting an increase in the indicator this year: in addition to the ongoing economic instability and a decrease in the income of Russians, the Bank of Russia has set limits for the segment on the share of loans issued to customers with an increased debt burden at the level of 35%.

In December 2022, the number of active payday loans (PDL) per customer reached 1.16. This is the maximum value for the past year, follows from the materials of the IFC “Honest Word”.

On average, in 2022, 1.09–1.16 loans were issued per person, while a year earlier it was 1.17–1.22.

In Eqvanta Group, in 2022, the average number of PDL loans per client per month turned out to be slightly higher, 1.19. However, the indicator decreased relative to 2021, when it was 1.23 loans, said Ion Boloboshencu, Risk Director at Eqvanta Group.

“Payday loans” are issued for up to 30 days in the amount of up to 30 thousand rubles. These are the most popular loans in the microfinance market – according to the NBKI, last year the number of issued PDLs was 2–2.8 million per month. They rank second in the market in terms of issuance (after Installment loans) – according to the Central Bank, over the past three years they accounted for 35–43% of quarterly issuance.

Last year’s trend is due to a combination of factors, market participants note. According to Sergey Vesovshchuk, CEO of Moneyman, “scoring became tougher, that is, loans were more difficult to obtain, some borrowers, having gained a positive reputation and feeling the need for borrowed funds for longer periods, moved to the Installment-loans segment (medium-term loans).”

The change in the behavior of borrowers also played a role.

“The prudent attitude to borrowing and repayment capabilities developed after the pandemic has further intensified against the backdrop of the economic situation in 2022,” explains Mr. Vesovshchuk.

Historically, the PDL segment is considered the most risky in the debt market. The average delinquency rate in it varies between 20-40%, according to the association of collectors NAPCA. With an increase in the average number of loans per client, the risk of overdue debt or default always increases, notes Andrey Petkov, CEO of the IFC Chestnoye Slovo, and in 2022, the level of delay on the first day from the planned payment date has increased markedly.

The more outstanding loans, the lower the likelihood of approval and the size of the limit, emphasizes Mr. Boloboshenko. To determine the risk profile, it is more important to look at the number of loans repaid without delinquency or at the depth of delinquency shown by the borrower, notes Marat Abbyasov, commercial director of MigCredit MFC. At the same time, collectors note that “those who service more than two loans are in an increased risk zone – there the probability of going into default is close to 50%.

However, since January 2023, the macroprudential limits introduced by the Bank of Russia for the share of loans issued to clients with an increased debt load have come into force, recalls Ion Boloboshencu. Thus, in the first quarter of 2023, the share of such loans in the MFO segment should not exceed 35%. In this regard, Mr. Boloboshencu explains, many microfinance companies have made adjustments to their scoring systems since January of this year to further control the level of debt burden of their borrowers.

Polina Trifonova