New restrictions for MFOs: no more than two expensive loans from 1 October
Microfinance organisations (MFOs) will not be permitted to issue a new consumer loan to an individual if the effective rate of the loan exceeds 200% per annum and the individual already has two outstanding loans or microloans like this. This will prevent situations when an individual takes out a large number of new loans at high interest rates to repay existing debts, thereby increasing his/her debt burden.
About one-third of MFOs’ existing customers had two or more expensive loans as of the end of 2026 H1. To get such a loan now, an individual should have only one outstanding loan with an effective rate of above 200%. However, MFOs will be able to grant a loan with an effective rate of below 200% per annum to an individual if his/her income is enough to service the new debt.
As soon as 1 April 2027, the Bank of Russia plans to toughen the requirements and oblige MFOs to issue no more than one loan with an effective rate of above 100% per annum to an individual. Moreover, the regulator will establish at least a three-day cooling-off period between the repayment of one expensive loan and the issue of another one.