Russian banks significantly tightened their lending standards in January, approving only 5% of consumer loan applications, a sharp decline from 22% a year earlier, according to data from the financial marketplace "Compare" reported by Izvestia.
The decline in approvals is attributed to the record high key interest rate set by the Central Bank, which has made loan interest rates unaffordable for many borrowers. Additionally, the regulator has imposed stricter restrictions on lending to high-risk borrowers, further reducing banks' appetite for risky loans.
Experts warn that this trend could push over-indebted Russians to seek loans from microcredit organizations, which often charge much higher interest rates, or to turn to gray creditors. The Central Bank has limited tools to combat this latter phenomenon.
The total volume of loans issued in January, including mortgages, cash loans, car loans, and POS loans, fell to 441 billion rubles, the lowest level since April 2022, according to Frank RG.