The market for borrowed money is still growing, even though the interest rates on loans, including mortgages, are going up. According to the FSSP, the number of people who fail to repay their loans is increasing every year and has already gone over 8 million.
But a member of the board of directors of the Central Bank of the Russian Federation, Mikhail Valeryevich Mamuta, reassures everyone: “Everyone will have credit holidays!” Hearing seemingly populist slogans from government structures is not new. Let’s try to figure out what can come of this?
This wound still bleeds in the hearts of the average Russian bank borrower. Memories of dashed hopes and unfulfilled dreams are still fresh. The pandemic, which began in the early spring of 2020, has made ruthless adjustments to forward-looking personal pocket budgeting.
“Reduction”, “remote”, “delay” – these terrible words plunged fellow citizens into horror. But the therapeutic NLP of our government began to calm us down a little. Like: “Don’t worry, whoever has to, will live even better. We will not leave you … You give credit holidays!
The people calmed down. But the banks, on the contrary, tensed up. Is that how it is? What are these holidays? But what about the standards of the Central Bank, what about the balance sheets and reports? But the state is inexorable: “The people must live well.” And point.
However, a good cause stumbled over the insurmountable barriers of principled bank employees. The head of the Central Bank, Elvira Nabiullina, was forced to state that out of 585,000 applications across the country for restructuring loans, approval was received in 200,000 cases.
The government had to slow down the influx of applications by setting restrictive parameters for receiving credit holidays:
– for consumer loans, the threshold is set at the level of 300 thousand rubles,
– for credit cards – 100 thousand rubles,
– for car loans – 600 thousand rubles.
For mortgage loans, the maximum values vary depending on the region: for Moscow – 4.5 million rubles, for the Moscow region, St. Petersburg and the Far Eastern Federal District – 3 million rubles, for other regions – 1.5 million rubles.
And, scratching the back of his head, he added:
“Credit holidays are provided subject to a 30% reduction in official, taxable income compared to the average income in 2019 due to the pandemic. The loan itself must be issued before April 3, 2020.
From that moment began the epic “credit care” about the Russians.
In total, by November 2020, 2,980,000 applications were submitted under the restructuring program, vacations were actually provided for 1,790,000 loans. The total number of borrowers as of December 2021 was 43 million. The share of people who took advantage of the program is only 4%! An insignificant amount is largely determined by complex parameters, and the need to obtain consent from the bank. So, for example, a deferment for housing and communal services was given to everyone without any numerous reservations and conditions, and almost 30% of citizens were forced to use the service. The figures show that, against the backdrop of a growing rate, discussing vacations under conditions is pure populism.
In October 2021, Viktor Momotov, who is the Chairman of the Council of Judges of the Russian Federation, states:
“The average level of debt load rose in 2020 from 47.1% to 49.1%. This indicates how much the average family gives as a percentage of yearly income to pay off bank loans. As of July 1, 2021, the total debt of individuals reached a huge amount of 23.9 trillion rubles.”
Following the analysts of the ONF project called “For the Rights of Borrowers” report:
“According to the results of the first half of 2021, the debt of Russians on loans grew by 13.6% to 22.64 trillion rubles, in June the debt increased by 23.8% in annual terms…”.
Following the increase of the loan portfolio of a Russian citizen, the measures for its delinquency also went up.
The Federal Bailiff Service provided Izvestia with statistics that clearly show this negative trend:
– 2012 – 2.2 million people.
– 2017 – 3.2 million
– 2018 – 4.4 million
– 2019 – 5.8 million
– 2020 – 7 million people
And during the past year, this figure has increased by another 1.6 million people.
The level of overdue debt in the first half of 2021 increased to 946.6 billion rubles, the average size of an overdue loan is about 17,400 rubles. from a person.
Considering the fact that, according to the GorodRabot portal, the average salary in Moscow is 44,634 rubles, it turns out that almost half of the personal income of a capital resident must be given to the bank, which unavoidably leads to arrears in other necessary payments, for example, for housing and communal services.
Not to mention the issues in regions where the average salary is no more than 30,000 rubles.
Vicious circle. This is how we live – we are waiting for bailiffs, if not for a loan delay, then for housing and communal services, if not for housing and communal services, then for taxes, etc.
The initial trial of the effectiveness of the implementation of credit holidays of the Central Bank was received back in 2020. And with such a system, they could have long ago developed the methods and legalized these processes, made them more convenient, simpler and more accessible.
In an interview published on February 15, 2022 on the website of the Central Bank, Mikhail Mamuta states:
“Holidays are a good safety net against stress, such as job loss, illness, or some other unforeseen negative event in a person’s life. It is important to understand that no one is immune from this, and the pandemic has demonstrated this very well to us. So far, statistics confirm that our forecast turned out to be fair. Mortgage and loan holidays were not taken by all borrowers in a row, but only by those whose incomes had greatly decreased. And what is important, 85% of those who received such a deferral went out of the mortgage holidays into the regular payment schedule. That is, thanks to this, more than three-quarters of borrowers from among those who faced serious problems did not spoil their credit history and did not allow delinquency.”
And continues. Please note – important:
“Therefore, we came to the conclusion that in conditions when life circumstances can change unpredictably for people, and there are more and more “long” debts on the market, the credit holiday mechanism should be extended to consumer lending on an ongoing basis. And now we are actively participating in the preparation of a bill on this.
The statistics above show how widespread the problem is. The Central Bank, led by Elvira Nibiullina, is only thinking about how to make credit holidays legal.
Now imagine that these holidays will be available for all types of loans, like they were in 2020 for utility payments. The special conditions caused by the problems due to a sharp drop in people's income led the government to announce holidays on utility bills. As a result, people's debts for utilities increased by 55 billion rubles and reached 625 billion rubles during that period.
According to Rosstat, the total debt of all service users in 2020 was 1.3 trillion rubles, with 800 billion being owed by the population. This led to a decrease in the effectiveness of collecting payments for utilities from the population, which experts believe is unlikely to recover.
Tatyana Vepretskaya, director of the National Housing Congress, believes that part of the debt will not be repaid, as some organizations have ceased operations, as stated in Rossiyskaya Gazeta.
After receiving relief on mandatory payments for almost six months, in the form of installment payments without penalties and interest, citizens found themselves unable to pay off their debts. Most of the population simply had no way to get the money.
A similar situation could occur with credit holidays.
According to Deputy Head of Rosreestr Elena Martynova, the total number of mortgages registered from January to October 2021 was 3.2 million. Looking at the above figures, one third of citizens have mortgages, and the remaining two thirds have consumer credit.
So where should the Central Bank focus? In all directions! For this organization, any issue should be the main one, especially if it concerns people's finances.
Mikhail Mamuta continues to stress the importance of passing a law on credit holidays.
“This is one of our priorities in measures to use the opportunities of the financial market to improve people's well-being. We discussed these initiatives with legislators last year and expect the bill to have a good chance of being passed this year.”
But it's too early to celebrate. If you look at the current conditions for providing credit holidays to those affected by the coronavirus and its consequences, then you can interpret these concessions as you wish.
“Borrowers can request credit holidays on mortgages and consumer loans for up to six months if their income for the previous month decreased by 30 percent or more compared to the average monthly income for the previous year,” the State Duma website states.
Gentlemen, let’s face reality! In our country, there is a huge difference between the official data indicated in personal income tax certificates and actual income. Demonstrating a 30% pay cut is not always convenient. Sometimes people receive a loan indicating higher salaries “by letter”. And sometimes there is nowhere for the white part to fall. Where do you get certificates with a fall by a third? Yes, and people are looking for work at the time of difficulties, not for reference, but for a new job.
Mikhail Valeryevich is sure that the people’s representatives will pick up the song of the Central Bank and create all the conditions for “improving the well-being of people.” And each of us will get the right to a vacation, at least once in a lifetime … at the end.
