Long-term loans are mastered online – Newspaper Kommersant No. 34 (7479) dated February 28, 2023

Microfinanciers significantly increased the share of medium-term loans issued online in 2022. However, new regulations may slow down its growth. In addition, not all companies are ready to develop scoring and issue longer loans in times of crisis, although they offer greater flexibility and comfort for the client. At the same time, market participants believe that, despite all the technological solutions, the share of non-returns online will be higher.

At the end of 2022, the share of medium-term loans (Installment, IL) issued online in the total volume of loans increased sharply and reached 20%. This is 5 percentage points more than at the beginning of last year. Such data follows from the review of the microfinance market published on Monday, February 27 by the Bank of Russia. The total volume of IL loans issued online amounted to RUB 72.6 billion. As a result, online medium-term loans almost equaled the market share of the more mature online payday loans (PDL) segment. According to the results of last year, they accounted for 22.3% of loans (against 18.3% at the beginning of 2022).

“Having learned to control the quality of PDL loans issued online in the conditions of an unstable economic situation in 2020, it was not difficult for MFIs to gain a similar expertise in issuing and managing their quality of loans in another segment — installment,” explains the Chairman of the Board of SRO “MiR » Elman Mehdiyev. However, it is still difficult to predict the growth of online issuance of medium-term loans. “In 2023, a combination of several factors will influence the issuance: macroprudential limits (MPL), lowering the maximum interest rate and the amount of overpayment will push the issuance towards longer terms. At the same time, the economic situation will push the issuance in the direction of reducing the terms,” Mr. Mehdiyev warns (see Kommersant of February 8). New regulations could reduce the market share of IL loans. This will happen both due to the reduction of approved limits for indebted borrowers, and a decrease in the level of approval of loans with large checks in general, says Alexey Perederiy, director of the risk management department at MigCredit.

However, some market participants are optimistic. The introduction of MPL from the beginning of 2023 may contribute to a further increase in the share of IL in the issuance structure, since this category has more flexibility in managing the marginal debt burden (MDL), Ivan Uklein, director of banking ratings at Expert RA, believes. At the same time, the vast majority of MFIs issue such a product with a longer term and a high average check only to verified clients, he emphasizes. “Large players that are able to invest heavily in data sources and scoring technologies can effectively assess and predict the solvency of borrowers online, which eliminates increased risks,” says Sergey Vesovshchuk, CEO of Moneyman.

New products (both in terms of structure and distribution channels) are always eligible for a higher level of arrears at the outset, market participants note. According to the Bank of Russia, at the end of the year, the delay in the microloan market was 34.5%. “Historically, offline search results have slightly better collection rates compared to online. But this difference has always been insignificant and, most likely, is covered by lower costs when working online,” notes Mark Savichenko, chief analyst at Ivolga Capital Management Company. The difficulty is that when working with medium-term loans, it is necessary to predict the financial condition of the borrower for a longer period, for a quarter or six months. In the current economic conditions, this may not be easy, Andrey Ponomarev, CEO of the Webbankir online financial platform, fears.

Polina Trifonova