Microfinance institutions’ operations from 4 through 30 April 2020

The Bank of Russia holds that during the non-work period from 4 through 30 April 2020 creditors acting in good faith will take into consideration whether debtors actually have opportunities to fulfil their obligations. Specifically, microfinance institutions (MFO) shall take into account whether or not borrowers have an opportunity to access remote services, and if not, MFOs shall proceed from the mode of restrictive measures that are effective in a territorial entity of the Russian Federation and may impact clients’ possibilities to visit MFO offices for carrying out timely operations.

The Bank of Russia assumes that if restrictive measures prevent microfinance institutions, credit consumer cooperatives, agricultural credit consumer cooperatives, or pawnshops from accepting borrowers’ loan payments on non-work days, this shall not be deemed to be a violation of borrowers’ obligations. Accordingly, borrowers shall not be subject to any additional interest, forfeits (fines, penalties), or other charges, as well as to foreclosure on the collateral.

Individuals whose monthly income has decreased by over 30% compared to their monthly income in 2019 and who are unable to fulfil their obligations under loan agreements are entitled to loan repayment holidays allowing a suspension of loan payments for 6 months.

To notify their clients of offices’ schedule of operations, changes in the procedures for rendering services and fulfilling obligations, and the functioning of online services, the Bank of Russia recommends that MFOs promptly update relevant information on their websites or communicate it to consumers and clients by any other means available.

The reference to the Press Service is mandatory if you intend to use this material.

04.04.2020 00.00.00