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In Russia increased the number of potential bankrupts among individuals

В России увеличилось число потенциальных банкротов среди физлиц

The number of Russian citizens who formally subject to the law on bankruptcy of physical persons, according to the November 1, 2019 reached 1 million 31.4 thousand people. This is evidenced by data from the National Bureau of credit histories.

“That’s how much citizens are in arrears with debt over 500 thousand rubles for a period in excess of 90 days (for all types of retail loans/loans)”, — explained in NBCH.

Therefore, indicate to the Bureau, during the year, the number of potential bankrupt increased by 4.9% (by 1 Nov 2018 figure was 983,3 thousand).

Overview of NCB also noted that as of November 2019 the majority of citizens — potential bankrupts continue to account for consumer loans — 65,7%, and the small proportion of debtors on the mortgage (2.2 per cent).

We will remind, last week has been released the Ministry of economic development (MED) of the Russian Federation, according to which half of borrowers this year have a record debt burden (PD) of 50% or higher that is spent on repayment of loans, more than half of their monthly income. Last year this group included 42% of borrowers.

Earlier, the head of the Ministry Maxim Oreshkin said that the growth of consumer lending is becoming a social problem and may lead to massive defaults in 2021.

According to estimates by the CBR, the aggregate debt load of the Russian population for all types of loans made up to 1 October 2019 to 10.6%. This is the highest level since at least July 2012. The total financial burden of the citizens increases with the end of 2017, mainly due to unsecured consumer lending.

The Bank of Russia has also repeatedly expressed concern about the pace of growth of consumer credit and debt load of Russians, which significantly outpaced the growth of nominal incomes and wages.

In turn, the MAYOR warned that the growing debt load of Russians may lead to the fact that consumer loans by the end of this year will slow down consumer demand in the Russian economy.

In response to the situation, the CBR is obliged from October 1, 2019 Russian banks and microfinance institutions (MFIs) in making decisions about the provision of consumer credit from 10 thousand rubles and more to count so-called debt burden indicator (PDN) of the borrower. That is, the financial institution will evaluate the ratio of monthly loan payments to monthly income of the borrower. Moreover, if the MFI gives the state entities the client of PD exceeds 50%, it will incur additional burden on capital in the amount of 50% of the loan amount (65% from 1 January 2020).

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