OREANDA-NEWS The Bank of Russia has imposed stricter restrictions on the issuance of unsecured consumer loans by banks and microfinance organizations (MFOs) to borrowers with a high debt burden. This is stated on the regulator's website.

Previously, the share of newly granted loans to customers with a maximum debt load of more than 80 percent should not exceed 25 percent. In the third quarter of 2023, the Central Bank (CB) will reduce this share by five percentage points, to 20 percent. For MFIs, the limit will be 30 percent.

"The decision was made in order to limit the growth of creditworthiness of citizens by discouraging lending to borrowers with a high debt load and artificially lengthening the term of loans (loans)," the regulator explains, noting that credit and microfinance organizations were able to adapt to the established limits.

The Central Bank introduced macroprudential limits from January 1, 2023. The regulator explained the decision by the need to minimize the risks of further growth in the creditworthiness of citizens "in the conditions of structural adjustment of the economy." In particular, there is a risk that citizens' problems with loans will lead to a reduction in demand in the economy.