26.09.2016, 07:44
Microfinance Organisations Continue to Decline in Number
OREANDA-NEWS. The Bank of Russia continues with its clean-up efforts aimed at driving unscrupulous players out of the microfinance market. In the second quarter, the number of microfinance organisations (MFOs) as per the State Register dropped by 292 to the total of 3,560.
These data are contained in the 2016 Q2 Review of Key indicators of Microfinance Organisations Development prepared by the Bank of Russia’s Financial Market Development Department and Non-bank Financial Institutions’ Statements Collection and Processing Department.
The year-on-year growth in the number of executed contracts in the sector was 31.4% (from 3 million to 4 million). The volume of microloans was up 57.4% to the total of 45.5 billion rubles, while the aggregate portfolio of microloans grew 33.2% to 79.2 billion rubles. The volume of microloans extended to individual entrepreneurs grew from 2.3 billion rubles in the second quarter last year to 3.1 billion rubles for the same period of this year, while those to legal entities were up from 2.8 billion rubles to 4 billion rubles. The average amount of a loan to an individual rose to 9.7 thousand rubles (against 7.9 thousand for April – June 2015).
The market average effective interest rate of the most popular microloans – payday loans (for a term of up to 1 month, for up to 30 thousand rubles) – was down 66.8 pp on the same period last year, to reach 613.2% per annum. As this takes place, the volume of payday loans in the total portfolio of MFOs is above 25% in 2016 Q2 microloans to individuals, according to the General Information on the 2016 Q2 Microfinance Market prepared by the Main Office of Microfinance Market and Financial Inclusion Methodology.
According to these data, there was also a notable decline in the numbers of other microfinance institutions: pawnshops (8,290 to 7,958 in 2016 Q2), credit consumer cooperatives (3,430 to 3,279) and agricultural consumer cooperatives (1,688 to 1,620).
The Bank of Russia will strike off pawnshops, credit consumer cooperatives and agricultural consumer cooperatives which fail to comply with or meet the regulator’s requirements as well as dormant entities. Also, a MFO can be removed from the register for failure to become a member of a self-regulatory organisation. In accordance with Federal Law No. 223-FZ, dated 13 July 2015, ‘On Self-Regulatory Organisations in the Financial Market’, such membership is mandatory provided there is a self- regulatory organisation of the appropriate type.
These data are contained in the 2016 Q2 Review of Key indicators of Microfinance Organisations Development prepared by the Bank of Russia’s Financial Market Development Department and Non-bank Financial Institutions’ Statements Collection and Processing Department.
The year-on-year growth in the number of executed contracts in the sector was 31.4% (from 3 million to 4 million). The volume of microloans was up 57.4% to the total of 45.5 billion rubles, while the aggregate portfolio of microloans grew 33.2% to 79.2 billion rubles. The volume of microloans extended to individual entrepreneurs grew from 2.3 billion rubles in the second quarter last year to 3.1 billion rubles for the same period of this year, while those to legal entities were up from 2.8 billion rubles to 4 billion rubles. The average amount of a loan to an individual rose to 9.7 thousand rubles (against 7.9 thousand for April – June 2015).
The market average effective interest rate of the most popular microloans – payday loans (for a term of up to 1 month, for up to 30 thousand rubles) – was down 66.8 pp on the same period last year, to reach 613.2% per annum. As this takes place, the volume of payday loans in the total portfolio of MFOs is above 25% in 2016 Q2 microloans to individuals, according to the General Information on the 2016 Q2 Microfinance Market prepared by the Main Office of Microfinance Market and Financial Inclusion Methodology.
According to these data, there was also a notable decline in the numbers of other microfinance institutions: pawnshops (8,290 to 7,958 in 2016 Q2), credit consumer cooperatives (3,430 to 3,279) and agricultural consumer cooperatives (1,688 to 1,620).
The Bank of Russia will strike off pawnshops, credit consumer cooperatives and agricultural consumer cooperatives which fail to comply with or meet the regulator’s requirements as well as dormant entities. Also, a MFO can be removed from the register for failure to become a member of a self-regulatory organisation. In accordance with Federal Law No. 223-FZ, dated 13 July 2015, ‘On Self-Regulatory Organisations in the Financial Market’, such membership is mandatory provided there is a self- regulatory organisation of the appropriate type.
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