An average Russian owes his credit organization around RUR 20K ($320). In the past ten years, debts have increased almost six times, Public Television of Russia (OTR) reports quoting the National Association of Professional Collection Agencies.
Around 30% debtors are those with unskilled or low-paid jobs such as security guards, drivers, waiters, medical workers, loaders, etc. Drivers have the most difficult circumstances as they give away one-third of their wages to pay debts.
Russians’ growing debts are an indicator of their worsening financial status, according to AMarkets Analytics Director Artem Deev. Most people in the country can’t afford expensive purchases, including household appliances or travel without getting a loan.
Statistics of microfinance organizations is even more telling. Their clients apply for a loan three times a year on average, usually taking out small amounts (RUR 20K to 30 K, or $320 to $480). The number of such clients is growing. People are increasingly relying on loans to close cash deficiency in their household budgets (a gap between income and spending).
The number of Russians currently involved in insolvency procedures (or those who cannot pay back their debts) is also growing. There are now 47 officially bankrupt people per every 100K citizens.
“By introducing a debt load indicator last October, the Russian Central Bank set a course for cooling the consumer lending market. This means that the number of borrowers who could potentially become bankrupt will be decreasing,” the analyst explains. “But at the same time, the number of quality lenders is also shrinking, as banks admit. The resulting trend will be that the number of people who can be found eligible for a loan will be going down.”