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With the debt noose around one’s neck.

Signs of yet another credit boom are noticed in Russia. From the beginning of the year the amount of retail loan has increased on 7% and reached 164 thousand rubles, evaluated the experts of National Bureau of Credit Histories. The banks explain such growth by more quality client service. However, independent experts are calling not to be so joyfull with such growth: loans are needed to be paid off sooner or later and with interest. And alongside with ongoing economic recession and falling incomes of the population, most of the borrowers will struggle to make ends meet. This threatens to even more increase the many millions of malicious nonpayer of bank credits.

Russian population again got hooked on a credit needle. As recent NBCH data attests, for the last year there was noticed growth in almost every credit sector. Most significantly has grown an average amount of car credits — on 13,4% (up to 631 thousand rubles). The average credit card limit has increased on 4% (up to 53 thousand rubles), real estate loan added 3,8% (up to 1,95 million rubles). In the retail loan segment the growth amounted to 1,6% — in average borrowers took 126 thousand rubles.

At that, in some of Russian regions credit boom has already come. In particular, in Samara region, Chuvashia, Jewish autonomous area and Chechnya growth of loan volumes taken by the population per year, amounts to 30-50%.

General Manager of NBCH Aleksandr Vikulin named two reasons of the rise in retail lending. They are inflation that leads to the price rise in commodities and services taken with a loan, and «a significant improvement of credit risk management procedure in the banks». According to Vikulin, the banks are willing to lend money to people, whose credit history doesn’t raise questions and whose revenues are maintained at a consistently high level.

Therefore we should be happy for the banks... After two years of the significant reduction of population’s credit activity, caused by economic recession in the country, they got a chance to actively do their main business again — «trading» money with quite a high interest. Let us remind, that Central Bank maintains the key rate (that is actually a base for this percent) on the level of 10%, assuming that annual inflation, upon the Central Bank forecast will not exceed 6%.

However, there is a serious reason to start worrying about new bank borrowers. Previous credit boom in the country, happened in the prosperous 2000s, turned into a «mass delay» and many millions of debtors as a result of the two following waves of economic crisis.

According to calculations of financial ombudsman Pavel Medvedev, at a present time 7,5 million of citizens have «bad debts», that are not serviced for more than 3 months. How do these million solve their debt problems? According to the specialist, in most cases they lend money from family and friends to settle up debts. And if such opportunities are not at hand, they are forced to build a «debt pyramid» — take a loan in a new bank to patch the holes in the old one.

And if the banks are «being stubborn» then the citizens are trying to trick them, consciously overvaluing their financial solvency. As bank statistics show, from January to September the number of fraud attempts in the preparation of loan applications increased in 1,5 times.

Herewith the financial ombudsman admits, that during this year the banks having burnt their fingers on giving «bad» loans, have become more cautious working with individuals. Nevertheless, the citizens who in the last several months were rushing to the banks to get money, are at a rick of realizing that paying back the money with matured interest will be a challenging if not an impossible task. The economic recession in the country is still going on (at a year end it will amount to 0,5-0,6%), inflation is growing, people’s revenues are falling (in 9 months — more than on 8%). It is clear that for the vast majority of borrowers paying off the debts will become an insoluble problem.

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