Russian credit users need approximately 11 monthly salaries to repay their current loans. This indicates that in the past five years their loan debts have increased by almost 50%, according to a survey by the National Association of Professional Collection Agencies (NAPCA) cited by Izvestia.
Overall, 75% of the economically active population in Russia has loan obligations. Currently, over 2 mio borrowers have to live only on a minimum wage because they spend around half of their income on repaying their bank loans. Around 5 mio Russians have a slightly higher income. So in total, around 10% are on the verge of poverty or below the poverty level.
At the same time, since the beginning of 2019 debts have been increasing five times faster than income. Debtors fall under sway by constantly taking out more loans to repay their existing debts.
Experts believe the problem will not be solved by restricting loan availability. It is necessary to raise wages otherwise people will not be able to manage their debt burden as well as other growing expenses.
Overall, 75% of the economically active population in Russia has loan obligations. Currently, over 2 mio borrowers have to live only on a minimum wage because they spend around half of their income on repaying their bank loans. Around 5 mio Russians have a slightly higher income. So in total, around 10% are on the verge of poverty or below the poverty level.
At the same time, since the beginning of 2019 debts have been increasing five times faster than income. Debtors fall under sway by constantly taking out more loans to repay their existing debts.
Experts believe the problem will not be solved by restricting loan availability. It is necessary to raise wages otherwise people will not be able to manage their debt burden as well as other growing expenses.