According to the Central Bank, in some regions the number of small and medium-sized businesses' applications for microcredits has increased several times over the year. The reason for the visits of individual entrepreneurs to MFOs was the unforeseen costs associated with the pandemic.
As reported in the Kostroma regional branch of the Bank of Russia, in 2020, about 100 local businessmen applied to MFOs, who issued about 170 million rubles of loans, which is almost four times more than a year earlier.
"For comparison, in 2019, only four individual entrepreneurs and 12 legal entities applied to MFOs", - explained the regional office of the Central Bank of the Russian Federation.
Thus, the total number of small and medium-sized businesses who have become clients of MFOs increased 6.5 times in the region over the year.
Experts explain the sharply increased popularity of microloans among entrepreneurs by the unexpected additional costs that arose last year due to the pandemic. Businessmen had to issue microcredits in order to ensure the functioning of their companies, pay wages to their workers on time and fulfill their obligations to suppliers in a timely manner.
“We are witnessing an increase in business representatives' interest in loans from state-owned MFOs. Last year, they provided significant support to regional businesses - for example, they provided loans at rates below the average market rate for bank loans. Or they offered minimum rates of 1-3% per annum to support businesses hit by the restrictions caused by the pandemic. The cost savings of entrepreneurs for servicing loans amounted to several million rubles a year”, - said Yevgeny Bykov, Deputy Manager of the Kostroma Branch of the Bank of Russia.
On average, each Kostroma enterprise that applied for a microloan received from MFOs about 2 million rubles in debt, and the average loan for individual entrepreneurs amounted to 1.4 million rubles.
At the end of March, it became known that many borrowers had problems with repayment of loans taken from MFOs. The number of microloans overdue for more than 90 days in Russia at the end of February rose to 5.4 million, which was the maximum figure, according to the Equifax credit bureau. In February, the number of overdue loans increased by 1.8% compared to January. Their share of all microloans issued in the country, on the contrary, turned out to be lower by 0.3 percentage points - 40.6%. In February, the volume of so-called “bad” microloans increased to a record 59.6 billion rubles. The growth was 2.2%. Last month, the share of overdue microloans increased by 0.5% to 34.7%.
The number of loans issued during February was reduced by 7.3% - to 1.8 million loans. The average size of a microloan amounted to 13,107 rubles, which is 0.4% less than in January. The amount of loans issued in February decreased by 7.6% and amounted to 23.8 billion rubles. This is the lowest result since last September. The total debt of Russians to MFOs today amounts to 171.8 billion rubles. This is 0.7% more than in January.
Earlier, the Central Bank announced the need to toughen the working conditions of microfinance organizations. The Central Bank intends to oblige these offices to post publicly information about their financial activities.
As for consumer loans overdue by more than 90 days, their share also increased - to 23.5% at the end of January 2021, compared to 17.8% in the same month last year. The total volume of bad loans issued by banks last year rose to 4.093 trillion rubles - by 572 billion rubles.
The Central Bank previously warned Russian credit institutions that about 20-30% of loans restructured last year could become problematic for banks in 2021.