Number of microloans issued in 2020 H1 drops to 2018 levels
By the end of 2020 H1, a decline in the number of new microloans was registered for the first time in several years, causing a decrease in the aggregate MFO portfolio. In contrast to the consumer segment, the volume of loans issued to small and medium-sized enterprises grew considerably (in Q2: by 22%). These data are provided in the recent issue of the information and analytical material ‘Microfinance market trends’.
In the context of the pandemic spread and the ensuing restrictive measures, the volumes of issued pay day loans and consumer instalment loans sank to the levels of early 2018. This was driven by the tightening of the risk policy adopted by MFOs. The increase in new SME loans was due to the growing demand of businesses for borrowed funds which they needed to bridge cash gaps and finance current liabilities. Another reason for this increase was the participation of MFOs in the programmes of additional government financing. In this segment, interest rates on microloans were
The effects of the pandemic dragged negatively on borrowers’ incomes and payment discipline, which in turn influenced the quality of MFO portfolio. However, according to top microfinance companies, the indicators of slightly overdue debts (0+, 30+ days past due) have been improving every week since
The number of complaints and appeals regarding MFOs received by the Bank of Russia peaked sharply in April to 2.3 thousand. This was related to interaction with MFO amid the imposed restrictive measures. In May — July, the number of appeals gradually subsided. Besides, only one-fifth of all complaints against MFOs turned to be duly substantiated.
Since the beginning of the year, 187 companies have been struck off the MFO register. In April — August 2020, 67% of companies which were struck off the register exited the market at their own initiative.