In 2020, the microfinance market of Russia posted steady growth only in the volumes of lending to small and medium-sized enterprises, which gained more than 25% each quarter.
Meanwhile, the volumes of payday loans at year-end 2020 remained level with year-end 2019. These are preliminary findings based on financial statements the Bank of Russia presents in its report Microfinance Market Trends in 2020.
Meanwhile, the volumes of payday loans at year-end 2020 remained level with year-end 2019. These are preliminary findings based on financial statements the Bank of Russia presents in its report Microfinance Market Trends in 2020.
According to the Bank of Russia, the overall year saw a decline in loan disbursements, especially noticeable in the second quarter. As a result, the aggregate microfinance loan portfolio declined in the same period, for the first time on record. The rebound to early 2020 data did not come until the end of the year.
This led to SME loans growing strongest by 50.4%. At the same time, the proportion of overdue loans in the segment dropped to 6–6.5% in the second half of 2020.
Overdue loans for the whole market started to decline in mid-2020 to total about 28% at year-end as rebounding business activity and a tightening in microfinance institutions’ risk policies drove improvements in borrowers’ payment discipline.
Consumers filed 24.1 thousand complains against microfinance companies in the past year, down 13.8% on 2019, mainly on the back of a drop in complaints related to debt recovery processes. The share of such complaints went down 18.7 pp to 30%.
With capital requirements for microfinance organizations becoming effective in 2020, 98% of microfinance companies were compliant at year-end. A number of companies were unable to qualify and had to exit the market.
Last year, twice as many entities were struck off the State Register of Microfinance Organizations on application compared to those excluded for non-compliance. The register comprised 1,385 companies as of year-end 2020.
