The Central Bank of Russia published its review of microfinance organisation (MFO) market trends, reporting that microloans issued grew by more than 50% in 2024 and highlighting the expanding role of MFOs linked to large marketplaces and banking-related groups. The update also outlines further measures to curb household over-indebtedness that will be phased in from 2025. Growth was led by MFOs that are members of financial groups, with 65% of microloans in this segment accounted for by groups based on major marketplaces and settlement non-bank credit institutions. Cheaper group funding was associated with interest rates that were, on average, 25% lower than those offered by other MFOs. Portfolio quality improved alongside an increase in new microloans and the continued tightening of macroprudential limits, with the share of lending to borrowers with debt service-to-income ratios of 50–80% and above 80% falling to 11% and 3%, respectively. From 2025, planned steps include reducing the cap on total interest and fees payable on a microloan from 130% to 100% of principal and limiting the number of simultaneously existing expensive microloans. The Central Bank of Russia notes that 22% of MFO customers have three or more microloans at the same time, and these borrowers account for almost half of the MFO consumer portfolio by outstanding balance.
Central Bank of Russia 2025-02-28
Central Bank of Russia reports 2024 microloan surge and sets out 2025 caps on microloan charges and concurrent expensive loans
The Central Bank of Russia's review shows a 50% growth in microloans in 2024, driven by MFOs linked to large marketplaces and banking-related groups. Measures to curb household over-indebtedness will be introduced from 2025, including reducing the cap on total interest and fees from 130% to 100% of the principal and limiting concurrent expensive microloans. The report highlights that 22% of MFO customers hold three or more microloans, representing nearly half of the consumer portfolio by outstanding balance.