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

Thursday, March 30, the Bank of Russia has summed up the results of a two-level system reform, microfinance, legislation divided the microfinance institutions (MFIs) in microfinance (IFC) and a micro-credit company (ICC).

The transition period during which the MFI was necessary to determine the market positioning, ended on Wednesday, March 29. IFC the result was the 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 results of the redistribution of the market, the Central Bank revealed during a forum “RUSSIA MFO 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 announced preliminary results of the reform. Data as of March 24, not much different from the latest statistics released by the regulator: the status of IFC has received 14 organizations, and the remaining 2425 had the status of microcredit companies.

Over the last year. dedicated to clearing this market, from the state register of MFOs were excluded 1,700 companies, or 28%. Despite this, the portfolio of loans to microfinance institutions,
in the III 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 in the first nine months of 2016 increased by 40% to 4.7 million people.

During the microfinance forum, the representatives of the Central Bank confirmed the information previously obtained from the participants in this market, a number of players who intend to receive the status of MFK and access to funding with the involvement of individuals, and has not received from the regulatory body response to their applications, despite the expiration of the transition period. These applications of the Central Bank will continue to consider, said the representatives of the regulator, so the corresponding statistics can differ slightly.

The Bank of Russia has formulated a clear position in respect of those MFIs who for years have not been able to decide on their market positioning and have not sent documents for 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, changes in legislation in respect of the microfinance market is aimed at supporting honest, law-abiding and viable companies that meet all legal requirements and limitations.