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The number of people falling into debt bondage to banks, is growing like a snowball.

Число людей, попадающих в долговую кабалу к банкам, растет как снежный ком.

The number of people falling into debt bondage to banks, is growing like a snowball is not a good life, and here Russia will face a serious problem.

The Ministry of economic development showed that half of Russian borrowers payments on Bank loans constitute more than 50% of their monthly income. This is evidence that the type of economy that has developed in modern Russia, leads its people directly to personal collapse. The main causes of low productivity and poverty the incomes of the majority of employees (in China the minimum wage is already higher than in Russia).

The fact that the monthly payments to banks the majority of Russian borrowers out more than half of their income is a clear measure of poverty is the working population (the unemployed because the loan typically do not). People get into debt, then perekreditovyvatsya, because I just can’t live up to the salary. So I live across the country. Our top management is in principle informed of the issue, but the policy conclusions do not hurry.

Meanwhile, relevant agencies are sounding the alarm. The head of the Ministry Maxim Oreshkin believes that by 2021, growth of debt load of the population could become serious social problem. They say in the Ministry of Finance also support this point of view. But what is the solution?

The first thing that comes to mind is to ban banks that left and right promote their consumer products to issue new loans. But what about the people? Invite them to economize on food and clothing (moreover, now the loan are going to sell even drugs)? But for the most part we don’t eat very high quality products. Buy even lower quality? But for the most part people in Russia today have become accustomed not to starve. To advise members of the middle class (and it is mainly about him) and their children to tighten their belts? And who will they be advised? Bankers and Ministers? Those who have not only with food, but with any conceivable consumption is just no problem?

Over the past five years wages of an absolute majority of the population has grown only in the reports of Rosstat and the government. In reality, revenues actually fell because of rising consumer prices, which is all right, too, only in the same reports. For example, we have become accustomed to the fact that the price of milk or, say, the dumplings are the same, only now the bundle does not kilos, to 800 or even 700 grams. Psychologically this trick can someone and comforting, but in reality, money for food in families is spent more, although salaries remain the same.

Yes, it is possible to forbid banks to make loans to those who they already have or who debt burden exceeds 40% -50%. And what will happen? We are talking about millions of people. According to the Central Bank of Russia in the country’s 39.5 million people has at least one credit. About 55% of the working population, which, according to Rosstat, in September 2019 was $ 72,2 million.

The debt burden indicator (PDN) 50% and above, according to the Bank, have 46% of those who have at least one credit. That is about 20 million out of 39.5 million. Obviously, most of them in the foreseeable future will not pay their bills and their debt load is likely to increase, not decrease.

Usually these people resort to programs of refinancing which offer banks. Often this is the only, albeit temporary solution for these customers. What would happen if banks were forbidden to refinance 20 million Bank customers? That’s certainly a whiff of social problems… And if you leave things as they are, snowball unsecured loans will grow and will lead to economic collapse. Where throw, everywhere a wedge. Where’s the exit?

Of course, the output would be a sharp increase in the welfare of Russian citizens. But fantastic scenario we’re not considering…

Meanwhile, in addition to unsecured loans (i.e., those payments which are guaranteed exclusively by the monthly wage), is also provided.

It’s not only about the pledge, but, for example, the presence of privatized apartments, other real estate or car. This topic bankers and related government officials will not even discuss. But if anything, a withdrawal on account of repayment of debts only home or car, which, by the way, in modern Russia for many really was not a luxury, and not so much a means of transportation, wrote Ilf and Petrov in the beginning of the XX century, as a source of earnings, will also collapse for many Russians.

Upstairs, apparently, understand that, but sooner or later the pressure of the growing bubble of consumer loans and lobbyists the government can take over. The same “non-market” solution to these problems, as the change in the employment structure, a significant increase in real wages, our authorities don’t seem concerned at all. And this is understandable. 94% of all organizations in the economy — formally private. The state, expressing the interests of private capital, to invade what he considers his prerogative, will not.

So, our government is meager and hopeless choice, between further inflating the credit bubble and the collapse of millions.

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