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Over 50% of micro loans issued online in Q1

15 July 2021

The share of online loans issued by microfinance organisations (MFOs) for the first time exceeded 50% of total loans disbursements to individuals. The pandemic emerged as a further driver spurring the sector to switch to remote servicing. The data are given in the Review of Key Indicators of Microfinance Organisations for 2021 Q1.

The quarter saw the progression of other structural changes including rising maturity and volumes of loans. Loans with a maturity of 30+ days worth 30+ thousand rubles each account for an increasingly significant portion of the MFO portfolio, totalling 145 billion rubles. At the same time, loans with a maturity of up to 30 days and worth less than 30 thousand rubles each totalled 62 billion rubles. This is associated with the regulatory changes of recent years: caps on the effective interest rate and the amount of loan debt, as well as the obligation to calculate the maximum allowed debt burden for any loan of over 10 thousand rubles.

An analysis of MFOs operating with various ranges of the effective interest rate has shown that the share of companies that switched over the past year to longer-term loans is almost twice the number of those that switched to the ‘up to 30 days and under 30 thousand rubles’ category.

Preview photo: Eviart / Shutterstock / Fotodom