Microfinancing organizations are finding new loopholes in lending restrictions. The new conditions that took effect on July 1 were supposed to reduce the maximum interest rate for microfinancing organizations and also curb the maximum amount of excess payments. The restrictions are not working though, experts note.
Since July 1, 2019, the maximum interest rate for microfinancing organizations must not exceed 1% per day while earlier it was 1.5%. Moreover, the maximum amount of overpayments has also been reduced. Now microfinancing organizations cannot make more than the double amount of a loan in service payments from a borrower.
According to financial ombudsman Pavel Medvedev, who spoke at a news conference at the Rossiya Segodnya Press Center, microfinancing organizations manage to easily bypass newly imposed restrictions.
He said that some restrictions are bypassed by soliciting a mandatory insurance to customers. Other restrictions regarding penalties, which must not be over the double amount of the debt, do not seem to be a problem either. When the debt is extended penalties are consolidated with the debt thus making a new basis for calculating penalties.