Central Bank: the debt burden of the population has updated its historical maximum

The debt burden of the population in the first half of 2021 increased from 9.8% to 10.2% of disposable income, according to the Bank of Russia financial stability review. This is a new all-time high and well above the pre-2018 average of 8%. Debts began to rise rapidly during the pandemic, and the ability to repay them dwindled.

Debt load and households are growing – families are paying more and more on loans from their income.

The largest share in the debts of Russians is occupied by unsecured loans – payments on such debt amount to 5.7% of average income in the total debt burden. In second place is mortgage (2.4%), in third – credit cards (1.4%), and in fourth – car loans (0.76%).

The increase in the debt burden was “primarily due to the accelerated growth of unsecured consumer lending, which is accompanied by a decline in lending standards.”

“The growth of consumer lending is not supported by the expansion of the client base of banks, but is due to an increase in the amount of loans, which creates risks of debt burden on citizens,” the regulator notes.

State Duma On November 24, it adopted a law on the right of the Bank of Russia from January 1, 2022 to introduce direct quantitative restrictions on the issuance of bank loans and microloans. From January 1, 2022, the Bank of Russia will begin to introduce direct quantitative restrictions on lending to the population for banks and microfinance organizations (MFOs) on behalf of the President of the Russian Federation.

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