Source: Central Bank of the Russian Federation in English
The Bank of Russia has published a report providing analytical findings on the 2015–2019 trends in the Russian retail lending market. The analysis was carried out on the basis of credit history bureaus’ data on a range of operations (anonymised data on individual loans and borrowers).
According to the report, growth in unsecured consumer lending is largely driven by new borrowers, which is a sign that loans are mostly raised for particular purposes. The overall number of borrowers has been gradually increasing both in mortgage and unsecured consumer lending. As of 1 September 2019, it totalled 39.5 million people.
The Russian mortgage lending segment has a substantial growth potential. Only 10.6% of the employed population (including co-borrowers) have outstanding mortgage loans. Borrowers almost never use unsecured consumer loans to make a mortgage down payment – the share of such loans does not exceed 5%.
However, the proportion of borrowers simultaneously having outstanding debt on several loan types is growing. This increases potential systemic risks in the financial sector that are associated with households’ debt overburden. The debt burden ratio (DBR) introduced in the banking regulation on 1 October 2019 will limit these risks.
The study has shown that it is advisable to apply to several credit history bureaus (CHB) for data – this will help collect correct information on all obligations of a borrower for calculating his/her DBR. Only 26% of borrowers have identical information on their outstanding loans in all the three CHBs that provided the data.
1 November 2019