The Central Bank introduced more stringent restrictions on lending to borrowers with a high debt burden

Bank of Russia installed tightening restrictions on lending to highly leveraged borrowers by reducing macroprudential limits (MPLs) for the third quarter of 2023. The MPL for the third quarter of 2023 is reduced by 5 percentage points compared to the second quarter.

The Central Bank sets the MPL for unsecured consumer loans. MPLs are designed to limit the share of risky loans in total disbursements.

Debt Burden Ratio (LNR) is the ratio of all payments on loans to the total income of the borrower. If this proportion exceeds 50%, then the borrower has to pay more than half of his monthly income on loans.

The share of loans provided by IFIs to borrowers with PTI over 80% was 30% (40% in the fourth quarter of 2022) with an MPL value of 35%. The growth of debt in the first quarter amounted to 2.5%, in April – 1.2%, which was ensured by an increase in demand for loans from the population. Loan applications increased by 15% in the first quarter compared to the fourth quarter of 2022.

Since the beginning of 2023, the Central Bank of the Russian Federation introduced quantitative restrictions on the issuance of consumer loans. We are talking about cases where loans are issued to citizens with a high debt burden and for a long period. Such restrictions are imposed directly on the volume of loans that can be issued per quarter. At the same time, according to the Central Bank, these measures will affect no more than 10% of loans issued.

In 2022, retail lending rates at the moment exceeded 20%, the incomes of Russians, according to Rosstat, were constantly declining, the population itself, according to the Central Bank, switched to a savings consumption model. Despite this, financial institutions issued loans for a record 27 trillion rubles.

Read about the situation in the microfinance market in the publication “Kommersant” “Borrowers toil without debt”.

Maria Fedotova