Microloan market rebounds as lending becomes more affordable
The market expansion in 2025 Q2 was driven by microloans with a moderate interest rate whose total cost of credit did not exceed 100% per annum. This primarily applied to new tranches within opened credit lines for the purchase of goods from marketplaces and online stores. However, the share of the most expensive microloans declined to 47.6% of total consumer microloans issued quarterly by microfinance organisations (MFOs), falling below 50% for the first time.
Microloans granted by MFOs related to the largest marketplaces and settlement non-bank credit institutions once again exceeded those issued by independent MFOs, demonstrating an opposite trend for the second quarter in a row.
The quality of both corporate and consumer microloan portfolios of MFOs deteriorated, as the share of microloans overdue for more than 90 days increased after a long-term decline. This was largely caused by a rise in late payments on consumer microloans provided in 2024 Q4 and 2025 Q1. Only 11% of total microloans issued during this period were repaid in full without customers taking out new microloans. More than half of total microloans granted were issued to borrowers who secured another microloan after repaying the previous one and fell into a debt spiral, with the amount of debt increasing in 20% of such cases. One in four borrowers in default was unable to make the first payment, due to an excessive debt burden. This indicates, on the one hand, that households are over-indebted, and on the other, that MFOs still have a high risk appetite.
To reduce individuals' over-indebtedness, lenders will be obliged to take into account only borrowers’ official incomes when assessing their debt burden; the number of simultaneous expensive microloans will be limited; and a cooling-off period will be established between the issue dates of such loans.
More details are available in the publication MFO Market Trends in 2025 Q2.