MFIs began offering clients refinancing loans from other MFIs

Participants in the microfinance market, in the face of fierce competition for clients, offer them refinancing of loans from other MFIs. The choice is made in favor of longer loans with a lower rate. Such products help to reduce the debt burden for the borrower, increasing its stability. However, they do not increase his loyalty to the new creditor.

Against the backdrop of tightening regulations, an unstable economic situation and the activation of banks in the microfinance segment, the struggle for clients among MFIs is intensifying. Market participants say that some companies are starting to offer loan refinancing, similar to how banks do it.

Thus, Lime-Zym recently announced the launch of a new Mega Installment product. The borrower can receive up to 100 thousand rubles for a year. at 0.51% per day, which is lower than the rate on shorter payday loans – 1% per day (from July 1 – 0.8% per day). The loan is aimed at high-quality repeat borrowers and those who want to restructure their debt, the company explains.

Moneyman is also working on the possibility of launching such a product, Anna Pankratova, director of products at the company, said, now it is in the testing stage. The Bank of Russia declined to comment due to the lack of collected and analyzed statistics on this issue.

“Companies have hit a glass ceiling in their development, so it is quite logical that they began to use similar tools as banks,” Elman Mehdiyev, chairman of the board of SRO Mir, explains the trend (see Kommersant on June 20) . According to the Banki.ru marketplace, more than 18% of bank loan requests are aimed at refinancing, which is the highest figure since the beginning of the year.

While the product is available to customers who have already had experience using Installment, they are able to plan their expenses taking into account the payment schedule once every two weeks, says Olesya Kiseleva, Managing Director of Lime-Zaim. In addition, “such a loan will be received by clients with a low debt load and a high score,” she explains.

On the whole, participants in the microfinance market are skeptical about refinancing. On the one hand, such a product fully complies with the new regulatory standards and macroprudential limits. Andrey Ponomarev, CEO of the online financial platform Webbankir, notes that “the need to repay a larger amount is compensated by a longer repayment period. And if the interest also becomes lower, the client’s debt load at the moment may even decrease,” he adds. On the other hand, if the borrower has a lot of loans and credits, then his risk profile is often weak.

At the same time, players note the weak results of other examples of the use of refinancing in the MFO market and the risks for the companies themselves. “Now they are lost in the market, which rather indicates the inefficiency of such a business idea,” notes Ion Boloboshencu, Risk Director at Eqvanta Group.

According to Roman Makarov, General Director of MFC Zaymer, MFOs, by restructuring the amount of debts bought out, “will reduce the debt burden of the borrower and return him to the credit market in a year or two, but at the same time will not have guarantees that this borrower will cope with payments for a long period of time.” In addition, as a result of the subsequent reduction in the debt burden below the acceptable level, “the borrower will become an attractive client for other MFIs and will be able to receive additional loans from them, returning to the previous level of debt load,” Mr. Makarov notes.

“The main obstacle for refinancing operations, if we rely on them as a mass product, is precisely the technological impossibility of checking the intended use of funds,” says Nikita Kotochigov, Product Director at MigCredit MFC. But in general, he says, “so far there is neither a technological nor a legal platform for correct accounting for macroprudential limits when refinancing.”

Polina Trifonova