The Central Bank has summed up results of the reform of the...

The Central Bank has summed up results of the reform of the microfinance market


Photo: Ekaterina Kuzmina / RBC

Reform of the microfinance market is complete. To attract funds of citizens for the subsequent loan will be able to 17 companies. Almost 2.5 thousand to Finance its business only at the expense of the owners and legal entities.

Thursday, March 30, the Bank of Russia has summed up the results of the two-level system reform on the legislative microfinance division microfinance institutions (MFIs) the microfinance and microcredit companies (IFC and ICC).

The transition period during which microfinance organizations was necessary to determine the market positioning, ended on Wednesday, March 29. IFC’s get right to Fund loans at the expense of the population, the ICC can work only on owners ‘ funds and borrowed funds from legal entities.

The result of the reallocation of the microfinance market between the two segments of the Central Bank revealed during a microfinance forum “MFO-RUSSIA FORUM: current issues of microfinance”.

As of March 30, 2461, the company received the status of the ICC and only 17 are in the status of the IFC.

Previously RBC announced the preliminary results of the reform. Data as of March 24, not much different from the latest statistics announced by the regulator: the status of IFC at the time received 14 organizations, and the remaining 2425 had the status of microcredit companies.

In just the last 2016 clearing of this market from the state register of MFOs were excluded 1,700 companies, the reduction was 28%. Despite this, the portfolio of loans to microfinance institutions,
at the end of the 3rd quarter of 2016 (the most recent data provided by the Central Bank) increased by 22% and amounted to 85.5 billion RUB Number of borrowers for the first 9 months of 2016 also increased by 40% and amounted to about 4.7 million.

During the microfinance forum, the representatives of the Central Bank confirmed the information received earlier from the RBC participants in this market, a number of players who intend to receive the status of MFK and access to funding with the involvement of funds of individuals and have not received a response on their applications from the regulator, despite the expiration of the transition period. These applications of the Central Bank will continue to consider, said the representatives of the regulator – so that relevant statistics could still slightly change.

The Bank of Russia has formulated a clear position in respect of those MFIs who for years have not been able to determine its positioning in the market and not sent the relevant documents for the procedure of re-registration.

According to representatives of the regulator, such companies are subject to removal from the registry. According to Bank of Russia estimates, their number will not exceed 250.

As noted by the head of the main Department of microfinance market and financial inclusion methodology of the Central Bank Ilya Kochetkov that all changes in the legislation in respect of microfinance market as a whole is aimed at supporting honest, law-abiding and viable companies that meet all legal requirements and limitations.