Russians began to be massively denied loans: two-thirds of applications were rejected

“This can already be called a trend for 2024”

Two-thirds of Russians – 66% – faced a loan refusal in 2024. This is evidenced by data from a survey conducted by the online alternative lending service Moneyman. For 38% of respondents who received a loan, banks or microfinance organizations (MFOs) reduced the actually approved amount. What caused such a demanding attitude of banks towards borrowers, how it will affect the financial situation of Russians – in the material “MK”.

Only less than a third of respondents—32%—said there were no lending refusals when applying for loans from banks and microfinance organizations this year. All other study participants stated that they were unable to obtain a loan when they applied for it. At the same time, for the vast majority (90%) of those who faced disapproval of their loan application, the reasons for such a decision by financial institutions remained unknown. More than a third of potential borrowers (38%) experienced the fact that after reviewing the application, the bank or microfinance organization reduced the actual loan amount.

Banks have increasingly begun to refuse loans to citizens due to the Bank of Russia’s targeted policy to curb unsecured lending and counter the growth of the population’s debt burden. In the fourth quarter of 2023, the volume of consumer loans issued decreased by 13% compared to the previous quarter, which is primarily due to stricter macroprudential limits limiting the issuance of loans to Russians with a high marginal debt burden (MLL). “This means that banks must provide themselves with a “safety cushion” in the form of a capital reserve in order to increase the bank’s stability in the event of an increase in losses on consumer loans,” explains the actions of the Central Bank of the Russian Federation, Associate Professor of the Department of State and Municipal Finance of the Russian Economic University. Plekhanov Mary Valishvili. — In addition, the mega-regulator has introduced restrictions on the issuance of unsecured consumer loans by banks and microfinance organizations (MFOs) for certain categories of borrowers. For example, the share of loans to borrowers with a personal income ratio in the range of 50-80% should not exceed 25%.” Let us remind you that PDN is the ratio of all monthly loan payments to the official average income of a person. For example, if a single citizen without a family pays 50 thousand rubles monthly for all available loans with a salary of 150 thousand rubles, then his personal income tax will be equal to 33%. If the monthly income of such a Russian does not exceed 100 thousand rubles, then the debt burden indicator will be estimated at 50%, and according to the requirements of the regulator. It will be difficult to get a new loan in such a situation.

Last year, the Bank of Russia tightened requirements for borrowers four times when issuing unsecured loans. “From January 1, 2024, new restrictions on lending to clients with medium and high debt loads began to apply,” Freedom Finance Global analyst Vladimir Chernov continues the conversation. — Now the permissible share of consumer loans provided to borrowers with a high debt load of 50–80% has been reduced to 25% of the quarterly issuance volume from the previous 30%, and the maximum limit for issuing credit cards of the same category of borrowers has been reduced from 20% to 10% of issues.” Since lending conditions have tightened, the refusal of financial institutions to issue loans can already be called a trend in 2024.

Refusal to issue or reduction in the volume of consumer loans issued should cool consumer demand and put downward pressure on the rate of inflation in the country, the analyst claims. And low inflation is a benefit for the economy and one of the policy goals of the Bank of Russia, to achieve which the regulator keeps the key rate at 16%.

As for the borrowers themselves, if they are refused a loan from a bank, sending an application to an MFO may not work, as has often happened before. “Tightening requirements also apply to the issuance of microloans: the PDN indicator must be calculated even for loans up to 10 thousand rubles, which means there will not be a mass “flight” from banks to microfinance organizations,” Mary Valishvili is sure. Under the current conditions, some borrowers will abandon the idea of ​​obtaining a loan altogether, while the most far-sighted will look at their credit history and begin to work on increasing their personal credit rating, carefully servicing and repaying existing debts ahead of schedule. According to Alexey Volkov, Marketing Director of the National Bureau of Credit Histories (NBKI), only this approach can increase the chances that banks will not refuse loans to borrowers in the future.