Bank of Russia updates methodology for estimating household debt burden at macrolevel
The Bank of Russia amended the methodology for estimating household debt burden at the macrolevel by improving the accuracy of debt service ratio (DSR) calculation through the use of anonymous data of credit history bureaus with respect to individual loans and borrowers.
Changes were made to all the elements of the indicator (term to maturity, interest rate, household income level); however, the most significant effect on the final estimate was achieved by using the refined data on the term to maturity for the outstanding loan portfolio. The DSR estimate was also updated by dividing the scheduled payment into the due and overdue debt and the constituents of various lending segments.
In line with the new methodology, as of 1 January 2021, the DSR was 9.8% of households' disposable income (vs 11.5% calculated based on the methodology used previously). In 2020, debt burden rose by 0.8 pp (vs by 0.9 pp as calculated in line with the previous methodology), of which unsecured consumer loans (including credit cards) accounted for 0.6 pp and mortgage loans, for 0.2 pp. Debt service ratio is regularly published in the Financial Stability Review. The issue for 2021 Q2—Q3 will contain data based on the new methodology.