Microcredits will no longer be obscene. Payday loans will disappear from the market Why did they decide to set maximum interest rates for microfinance organizations?

maria_t 13.08.2019
Money (95)

Of all the loan options that I looked at on the Internet, Denga suited the conditions best. Here, as a pensioner, I received a loan at a special pension rate with flexible repayment terms. You didn't need a pension certificate, just a passport. I took 13,000 rubles for a period of 2 months. When the opportunity arose to give in advance, they didn’t charge me too much. We recalculated the percentages based on the number of days. As a result, the overpayment was not so significant.
They treated us with understanding, were friendly, and the terms of the contract were all honestly observed. I'm happy with this attitude.

Roman777 26.07.2019
League of Money (13)

I took out a loan in the amount of 35 thousand rubles; I needed money for serious car repairs. Everything in the company is thought out for maximum customer convenience. After my application, I met with the manager and an agreement was signed. I received the money the next day through the Contact payment system. Everything went quickly, without unnecessary red tape and problems. I repaid the loan through Yandex Money. Thanks to the company for your help.

elenn 22.07.2019
Money (95)

I live in Voronezh. This was my first time contacting Denga. In general, I rarely write a review about a particular company, only if it deserves it.
The Money office is located next to my house at st. Dimitrova. I had heard about this company before, and decided to go in and find out about the conditions. At the entrance, a girl kindly greeted me and asked how much I needed. We didn't need much, only 2500 rubles. She offered me the “For Everyone” tariff, which involved an overpayment of 0.001% per day. That is, pennies. I read the terms of the contract carefully and did not find any extra payments. They asked me for my passport details and mobile phone number for contact. I filled out the application and within 10 minutes I was given this amount.
I had to give it back in 5 days, which I did on time. All conditions were met honestly. It's nice to deal with such people. I would like to hope that the percentage will not increase and that it will be possible to apply in the future.

According to Kommersant's information, in the near future the State Duma plans to introduce changes to legislation that will force most microfinance companies (MFOs) to leave the market or seriously reformat their activities. After recent statements by President Vladimir Putin about the inadmissibility of the pricing policy of such players, deputies decided to establish in the law maximum interest rates for microfinance organizations. Now the profitability of microloans can reach 800% per year, and it is planned to limit it to 150% per annum. Market participants believe that such a restriction will lead to the unprofitability of microloans and will aggravate the problem of funding MFOs.

Two sources in the financial and economic bloc of the government, as well as several market participants, told Kommersant that appropriate amendments to the laws “On Consumer Credit” and “On Microfinance Activities and Microfinance Organizations” are being prepared. The essence of the amendments is to limit the maximum amount of overpayment on microloans. “We intend to set a ceiling on the interest rate on MFO loans at 150%,” Anatoly Aksakov, head of the State Duma Committee on the Financial Market, confirmed the upcoming amendments. “The corresponding proposals have been received by the Bank of Russia and are currently being studied,” the press service of the Central Bank told Kommersant.

Now the average market values ​​of the full cost of microloans, according to the Central Bank, reach 599.311%, and the maximum values ​​of MFO rates are 799.081%. At the same time, the PSC for bank consumer loans is 28.250%. “The Rossiya Association is working on various proposals to equalize competitive conditions in the consumer lending market, including those given above,” said Alina Vetrova, first vice-president of the Rossiya Association. “In our opinion, the debt burden should be feasible for the consumer and comparable, regardless of who provides the loan - a bank or another financial institution."

Deputies began preparing such revolutionary restrictions for the microfinance market on the instructions of President Vladimir Putin to reduce the debt load of the population, Kommersant's interlocutors reported. At the end of April, Vladimir Putin compared microfinance organizations in modern Russia with the old woman pawnbroker from Dostoevsky’s novel Crime and Punishment. “The famous grandmother from Dostoevsky is a very modest person compared to our money lenders today,” the head of state said at a meeting of the State Council Presidium dedicated to protecting consumer rights. The amendments are planned to be adopted at the spring session of the State Duma, and they should come into force before the end of this year, one of the interlocutors participating in the discussion of the project told Kommersant.

Vladimir Putin, President of the Russian Federation, April 18

Among the creditors there are those who deliberately mislead people. As a result, most borrowers almost inevitably end up in a debt spiral.

If a requirement for a maximum overpayment of one and a half times is introduced, players specializing in issuing short-term loans - the so-called payday loans (PDL) - may be the first to leave the MFO market. Or they will have to reorganize and expand business processes, market participants believe. According to the Central Bank at the end of the third quarter of 2016, the share of short-term loans in the total MFO portfolio is about 30% (RUB 22 billion).

“MFOs that issue short-term loans can expect a decrease in business profitability. Maintaining such a norm will make them simply uninteresting for market participants themselves,” says Evgeniy Abolonin, Chairman of the Board of Directors of the Rusmikrofinance group of companies. “The vast majority of microfinance organizations will stop operating, and the remaining ones will move to the segment with large amounts and terms,” said Liga Trupa, director of the online lending service E Loan.

Moreover, such restrictions run counter to the development of financial regulation in recent years, when the interest rate was calculated based on market realities, Ms. Trupa believes. “This (limiting the rate to 150% per annum) will close access to borrowed funds for millions of citizens who currently use payday loans,” she is indignant. According to her, microfinance organizations will not be able to issue short-term loans at such a rate, and banks will not lend to such clients, and the country will return to the time of “black lenders.” At the same time, limiting the profitability of loans will raise the question of finding funding at an adequate cost for MFOs, market participants indicate. “If MFOs switch to long-term loans, they will need funding for long periods, and now attracting investors to the sector is quite problematic,” warns Mr. Abolonin.

Experts explain the severity of such measures by the fact that for too long the Central Bank did not interfere in regulating the pricing policy of the segment of microfinance organizations, although they came under supervision back in 2014. “During all this time, the regulator has not carried out softer reforms, and now the moment has come when the issue needs to be resolved more radically,” says Dmitry Yanin, head of the International Confederation of Consumer Societies.

Microfinance organizations (MFOs) have limited the accrual of interest on microloans.

Limitation of interest on microloans

On January 1, 2017, Articles 12 and 12.1 of the Federal Law “On Microfinance Activities and Microfinance Organizations” dated July 2, 2010 N 151-FZ came into force, which introduces a ban on Microfinance Organizations (MFOs) charging borrowers unreasonably high interest rates on consumer microloans. What is the reason for limiting interest on microloans? The reason is as simple as the world - microfinance organizations (MFOs), striving to receive excess income, issue microloans instantly and with virtually no verification of the client’s solvency.
Microloan- this is a small loan that is provided for a short period of time, and, as a rule, without confirmation and verification of the borrower’s solvency.

In Article 2 of Federal Law No. 151-FZ dated July 2, 2010, the concept of “microloan” is described as follows:

3) microloan - a loan provided by the lender to the borrower on the terms stipulated by the loan agreement, in an amount not exceeding the maximum amount of the borrower's obligations to the lender on the principal debt established by this Federal Law;

Federal Law No. 151 of July 2, 2010 There are two types of restrictions on the accrual of interest by Microfinance Organizations (MFOs) on issued consumer microloans, namely:

1. Three-fold limitation on the accrual of interest under a consumer microloan agreement.
2. Stopping the accrual of interest on overdue loans as soon as the interest reaches twice the amount of the outstanding portion of the debt.

The Bank of Russia explains the essence of the restrictions introduced by Federal Law No. 151, which boils down to the following:

1. From January 1, 2017, a three-fold limitation on the accrual of interest under a consumer microloan agreement entered into from this date comes into force.

If the repayment period under the agreement does not exceed one year, microfinance organizations (MFOs) do not have the right to accrue interest to the individual borrower after the amount reaches three times the loan amount.

So, for example, with a loan of 5,000 rubles, the borrower’s debt at no point in time can exceed 20,000 rubles. This amount includes:

• loan amount of 5,000 rubles
• accrued interest in the amount of 15,000 rubles (5,000 rubles x 3).

The Bank of Russia draws the attention of borrowers to the fact that the limitation established on the amount of interest does not apply by law to penalties (fines, penalties), as well as to payments for services provided to it for a fee.

This is how it is stated in the Federal Law of July 2, 2010 N 151-FZ (as amended on July 3, 2016) “On microfinance activities and microfinance organizations” (as amended and supplemented, entered into force on January 1, 2017) :

Article 12. Restrictions on the activities of a microfinance organization (as amended by Federal Law dated December 29, 2015 N 407-FZ)
1. A microfinance organization has no right:
9) accrue interest to an individual borrower under a consumer loan agreement, the repayment period of the consumer loan for which does not exceed one year, with the exception of penalties (fines, penalties) and payments for services provided to the borrower for a fee, if the amount accrued interest agreement will reach three times the loan amount. The condition containing this prohibition must be indicated by the microfinance organization on the first page of the consumer loan agreement, the repayment period of the consumer loan for which does not exceed one year, before the table containing the individual terms of the consumer loan agreement; (as amended by Federal Law No. 230-FZ dated July 3, 2016)

In this case, the MFO will be able to start accruing interest again only after the borrower has partially repaid the loan and (or) paid the interest due.

Penalties (fines, penalties) should be charged only on the portion of the principal debt not repaid by the borrower.

So, for example, if the outstanding portion under an overdue agreement is 5,000 rubles, the amount charged from the borrower will be equal to 15,000 rubles, which includes the amount of overdue debt - 5,000 rubles and accrued interest - 10,000 rubles (5,000 rubles x2).

Each MFO is required to place information about these restrictions on the first page of a short-term consumer loan agreement before the table with the individual terms of the agreement.

Federal Law No. 151-FZ dated July 2, 2010 “On microfinance activities and microfinance organizations” (as amended and supplemented) speaks about this restriction as follows:

Article 12.1. Peculiarities of calculating interest and other payments in case of delay in fulfilling loan obligations (introduced by Federal Law dated July 3, 2016 N 230-FZ)
1. After a delay in fulfilling the obligation of a borrower - an individual to repay the loan amount and (or) pay interest due, a microfinance organization under a consumer loan agreement, the repayment period of the consumer loan for which does not exceed one year, has the right to continue to accrue interest to the borrower - an individual only on the part of the principal debt that has not been repaid by him. Interest on the portion of the principal amount not repaid by the borrower continues to accrue until the total amount of interest payable reaches an amount equal to twice the amount of the outstanding portion of the loan. A microfinance organization does not have the right to accrue interest for the period of time from the moment the total amount of interest payable reaches an amount equal to twice the amount of the outstanding part of the loan until the borrower partially repays the loan amount and (or) pays the due interest.

2. After there is a delay in fulfilling the obligation of the borrower - an individual to repay the loan amount and (or) pay the due interest, the microfinance organization under a consumer loan agreement, the repayment period of the consumer loan for which does not exceed one year, has the right to charge the borrower - an individual a penalty (fines, penalties) and other measures of liability only for the portion of the principal amount not repaid by the borrower.

3. The conditions specified in parts 1 and 2 of this article must be indicated by the microfinance organization on the first page of the consumer loan agreement, the repayment period of which does not exceed one year, before the table containing the individual terms of the consumer loan agreement.

• Message from the Bank of Russia dated January 1, 2017 - “The accrual of interest on short-term microloans is limited”
• Federal Law of July 2, 2010 N 151-FZ “On microfinance activities and microfinance organizations” (as amended and supplemented)
• Federal Law of July 3, 2016 N 230-FZ “On the protection of the rights and legitimate interests of individuals when carrying out activities to repay overdue debts and on amendments to the Federal Law “On MICROFINANCE ACTIVITIES AND MICROFINANCE ORGANIZATIONS””

The State Duma adopted a number of amendments to the federal law on microloans in 2019. New rules will apply to both microfinance organizations and their clients. In most cases, the changes are aimed at protecting borrowers who, due to a hopeless situation or out of ignorance, can take out loans at huge interest rates and, as a result, lose their property.

The situation on the microloan market now

• they can only talk with debtors; there should be no threats or physical violence;
• You can only contact debtors during the daytime;
• limited number of calls and notifications per day;
• 3 persons - parents, wives / husbands, colleagues, boss, etc., collectors can only deal with the payer himself and his guarantor;
• you cannot disclose personal information - for example, write a notice in the entrance that “The debtor lives here”;
• Damage to property and invasion of private property is not permitted.

In fact, the debt collector can only warn the debtor about possible liability and then try. The same rules will continue to apply in 2019.

Consequences for MFOs

Analysts predict that the measures taken will lead to a reduction in the MFO market, since many companies simply will not be able to adjust their business model to the new legal requirements. As a result, the smallest players will disappear or be absorbed by competitors.

For customers, innovations, of course, make life easier. Now they will be firmly confident that the maximum rate for them will not increase, and the amount of loan obligations will not go beyond reasonable limits. The rights of collectors are already significantly limited, so debt collection will be more civilized and will often be carried out in the most logical way - through the court with the subsequent seizure of the defaulter’s accounts or withholding the amount of the debt from his wages.

At a meeting held at the end of last week at the Central Bank, the self-regulatory organization MFO "MiR" proposed a mechanism approved by market participants for differentially establishing the size of maximum debt obligations depending on the amount. The meeting participants told the Kommersant newspaper about this. According to the proposals, the maximum amount of debt, taking into account interest under the loan agreement, will vary from one and a half to three times the amount of the debt.

Thus, for a loan of up to 15 thousand rubles, the amount of interest under the agreement cannot exceed 300%, from 15 thousand to 30 thousand rubles - 250%, from 30 thousand to 60 thousand - 200%, and for an amount over 60 thousand . rubles, the maximum profitability will be 150%. The Central Bank reported that “the proposal of the SRO “MiR” will be studied.”

The proposal was the market’s response to the order of Russian President Vladimir Putin to ensure amendments to legislation providing for a reduction in the maximum amount of borrower obligations to microfinance organizations, and the subsequent initiative of a group of deputies to limit the maximum amount of interest to one and a half times the loan amount. Amendments can be adopted until November 1. Market participants note that limiting the maximum rate on MFO loans to 150% may have a negative impact both on the microfinance market itself and on consumers - due to reduced competition.