By Vestnik Kavkaza
One of the most relevant topics on the financial market is the heavy debt load of the Russian population. In recent time criticism of banks which have given various loans has escalated. At first the chairwoman of the Central Bank, Elvira Nabiullina, said that citizens don't always understand that their interest rates on loans are huge. Then, the Central Bank stated that probably limitation of consumer credit costs would be launched. Recently a survey has been published that every fifth Russian citizen has more than 5 loans which have been taken out in order to pay previous debts. This can cause mass defaults by citizens. Debt collection agencies tell awful stories about the debts of Russian citizens. In the near future, considering the order by President, the government is due to present a draft on restriction of credit rates, including consumer credits. Experts discussed the current situation.
According to Dmitry Miroshnichenko, leading expert of the Institute of Development Center under the National Research University - Higher School of Economics, “the legal environment gives wide opportunities to all sides of the process. The limits should be much narrower. We have no fundamental laws on consumer credits. We have no law on giving consumer credits. We have no and there are no plans on development of a special law on credit cards, because credit cards are a separate kind of credit activity. We still have no law on the so-called bankruptcy of individuals. We have no law on the activities of debt collection agencies. Thus, we have no written game rules. Our citizens are children in the sphere of financial management. You can send a child to buy bread or milk, but nobody would sell consumer electronics to a child. Without an individual filter, unfortunately, the problem cannot be settled, and we will be doomed to a worsening of the situation. So, I don’t expect any radical improvement, but for banks to be stricter in selecting borrowers and to begin to refuse people who have debts from additional credits, or for these people to have second thoughts.”
Natalya Komyakhina, member of the Association of Russian Banks, thinks that “if mechanisms of assessment of paying capacity and debt load are to be fast, banks will spend less money on operational activity and we will thoroughly analyze the paying capacity of individuals.”
“The problem of lowering interest rates for loans should be considered as a whole,” Svetlana Bryukhovetskaya, deputy dean of the Finances and Credit Department of the Financial University under the Russian government, states. “Consumers don't get cheap credits by magic or somebody’s order, but due to the situation on the market, when conditions are established for money to be cheap. How to do it? This should be considered by experts. I think a set of measures should be taken, rather than one-sided ones, like stiffening credit policy, fixation of rates, and so on, because that would lead to a situation in which consumer credit activities go underground.”
