The Bank of Russia initiated shutdown of 8 shadow lender websites

The websites of these companies have been shut down, while the companies themselves have been struck off the state register of microfinance organisations, however at this point they are still engaged in microfinancing. On their websites these companies unlawfully used the abbreviation MFO, provided information on the procedure and conditions for microlending, indicated interest rates, provided electronic fill-in forms, active links/buttons/inscriptions ‘receive/arrange/take a loan’, ‘apply for a loan’ and ‘collateral/maternity capital-backed loan’, and suggested placing a deposit or investing funds, which constitues a violation of Federal Law No. 151-FZ, dated 2 July 2010, ‘On Microfinance Activities and Microfinance Organisations’.

In December 2016, the regulator was granted the status of a competent organisation with authorisation to request registrars to stop delegating domain names.

In 2016, the Bank of Russia exposed 1378 companies allegedly involved in illicit activity in the microfinance market and forwarded this information to law enforcement and other authorised agencies. After these new instruments had been developed and launched, the Bank of Russia obtained additional capabilities in countering shadow lenders who proffer their services online.

‘The Bank of Russia seeks to ensure that only scrupulous, law-abiding and viable companies, which have the required status, comply with the regulator’s requirements and follow the established rules, operate in the microfinance market,’ explained Ilya Kochetkov, head of the Bank of Russia Main Office of Microfinance Market . ‘Countering shadow lenders who are illegally issuing consumer loans under the guise of microfinance organisations is of paramount importance in protecting the financial rights of our citizens.’