THE ACTIVITIES OF MICROFINANCE ORGANIZATIONS MAY BE BANNED IN RUSSIA

By 2022, over 17 million Russians have taken out microfinance loans. The indicator increased by 3.1 million people compared to the end of 2021. The total amount of loans amounted to 608 billion rubles, Izvestia writes.

If the bill is adopted, the law "On Microfinance Activities and Microfinance Organizations" will be considered invalid.

"The urgency of the cancellation is due to the current socio-economic situation in the country, which increasingly forces the least socially protected segments of the population to turn to microfinance," the explanatory note says.

Low income, unstable place of work or the absence of branches of large banks in the locality regularly force 20% of the country's residents to apply for loans. At the same time, about 40% of them have a damaged credit history.

The author of the bill, Sergey Mironov, noted that the action of microfinance organizations in Russia leads to a significant increase in the debts of the population, as well as to a decrease in the standard of living. At the same time, even previously adopted restrictive laws do not help.

Indirectly, the law should have an impact on reducing the crime rate, but directly on prohibiting the issuance of loans at extremely high rates and protecting low-income segments of the population from taking on excessive credit obligations.