Page 72 - RusRPTDec23

billion rubles compared to the record high of 649 billion rubles in September. Among the factors contributing to this decrease are a 19% reduction in "Family Mortgages" (from 289 billion rubles to 235 billion rubles in September) and a 17% reduction in "Preferential Mortgages" (from 289 billion rubles to 241 billion rubles). According to preliminary data, market mortgage lending decreased by 25%.
According to preliminary data, consumer lending in October increased by only 1.1% compared to 1.5% in September. This trend is explained by a noticeable rise in loan interest rates and stricter macroprudential regulation. As a result, on one hand, there was a decrease in demand for loans, and on the other hand, banks increased their requirements for borrowers' creditworthiness, reducing the loan issuance volume.
Starting from October 1, 2023, macroprudential limits have been significantly tightened, and a separate limit has been allocated for loans with a PDN (Payment Default Notice) of 50-80%. In the fourth quarter of 2023, banks will need to restrict the share of loans to such borrowers to 30% for personal loans and 20% for credit cards. For borrowers with a PDN >80%, the restriction will be even stricter, allowing no more than 5% of the total loan volume (20% in the third quarter of 2023). The limit for loans exceeding five years also remains at 5%.
The debt of Russians to microfinance organisations has reached a record 350bn rubles, Izvestia writes, citing data from the SRO MiR. Over the year, the portfolio of microloans grew by 18%, and the number of MFO clients reached almost 20mn. Experts explain this by rising rates on conventional loans, tightening requirements for borrowers in banks and the desire of people to maintain their usual standard of living in an inflationary environment (the share of loans for current needs is growing , and decreases for large purchases).
By the end of the third quarter, the total volume of microloans reached 348.1bn rubles, which is 18.2% more than a year ago, according to data from the largest association of microfinance market participants, SRO MiR. Compared to the second quarter, the growth rate of the portfolio slowed down slightly - from 6.4% to 5.5%. The number of MFO clients increased by 2.7mn over the year, to 19.9mn.
Major market participants confirmed to the publication the growth of the loan portfolio and noted that they have not yet recorded changes in the level of overdue loans. By the end of the year, the microloan portfolio could reach 360bn rubles, Izvestia’s interlocutors believe.
Experts name several reasons for the increase in the number of MFO clients. Firstly, this is an increase in rates on traditional loans following the key rate. With loan rates reaching 25% per annum, short-term microloans probably don't seem so expensive anymore. In addition, banks began to tighten their approach to borrowers with high debt loads. Those who are refused by banks go to microfinance organisations. The third reason is the desire of people to maintain their usual standard of living in conditions where the growth of real incomes does not keep pace with inflation. The share of loans for current
72 RUSSIA Country Report December 2023 www.intellinews.com