{"id":72536,"date":"2025-08-15T21:36:09","date_gmt":"2025-08-15T21:36:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/72536\/"},"modified":"2025-08-15T21:36:09","modified_gmt":"2025-08-15T21:36:09","slug":"russian-banks-reject-80-of-loan-applications-as-debt-burden-rises","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/72536\/","title":{"rendered":"Russian Banks Reject 80% of Loan Applications as Debt Burden Rises"},"content":{"rendered":"<p>Russian banks are turning down the overwhelming majority of loan applications, with just 21.4% approved in July, according to data from the National Credit History Bureau <a href=\"https:\/\/iz.ru\/1936950\/evgenii-grachev\/dolevoj-pas-banki-otklonili-pochti-80-zayavok-rossiyan-na-kredity\" title=\"cited\" rel=\"nofollow noopener\" target=\"_blank\">cited<\/a> by the pro-Kremlin daily Izvestia.<\/p>\n<p>Between 75 and 80% of applications for car loans and consumer credit are denied, while about 60% of mortgage applications fail despite the availability of government-subsidized programs.<\/p>\n<p>A recent cut in the Central Bank\u2019s key interest rate, from 21% to 18%, has done little to improve approval rates, which rose by less than a percentage point over the past month.<\/p>\n<p>The tightening reflects a growing caution among lenders in response to an increase in overdue repayments on existing loans, the Central Bank said.<\/p>\n<p>\u201cDelinquency problems partly reflect pressure on household incomes and budgets due to inflation and higher payments on existing debt,\u201d said Vladimir Chernov, an analyst at Freedom Finance Global.<\/p>\n<p>If a borrower spends more than 80% of their income servicing debt, the likelihood of rejection approaches 100%, according to Inna Soldatenkova, head of expert analytics at the financial portal Banki.ru. Even with a debt-to-income ratio of 50%, the risk of being turned down remains high, she said.<\/p>\n<p>Economists say the low approval rate is a symptom of Russia\u2019s heavy household debt load, which reached nearly 37 trillion rubles ($420 billion) by the end of 2024.<\/p>\n<p>Borrowers who already have loans are unlikely to qualify for new ones, said economist Andrei Barkhota.<\/p>\n<p>Many turn instead to microfinance organizations, which have looser requirements, or to the shadow lending market, he added.<\/p>\n<p>According to a survey by the state-run pollster VTsIOM, 32% of borrowers in 2024 approached microfinance firms because of their more relaxed standards, while 30% did so after being rejected by a bank.<\/p>\n<p>But rejection rates are climbing even in the microloan sector, pushing more Russians toward unregulated lenders.<\/p>\n<p>Further cuts to the key interest rate could ease the strain by lowering monthly payments, Soldatenkova from Banki.ru said.<\/p>\n<p>The faster and deeper the key rate drops, the easier it will be to get a loan, Chernov agreed.<\/p>\n","protected":false},"excerpt":{"rendered":"Russian banks are turning down the overwhelming majority of loan applications, with just 21.4% approved in July, according&hellip;\n","protected":false},"author":2,"featured_media":72537,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[4498,45,49,48,46,133],"class_list":["post-72536","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-banks","tag-business","tag-ca","tag-canada","tag-economy","tag-finance"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/72536","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=72536"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/72536\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/72537"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=72536"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=72536"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=72536"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}