The activity of microfinance companies in Russia is regulated by Federal Law of 02.07.2010 № 151-FL «On microfinancing activity and microfinance organizations». The Federal Law of 29.12.2015 No.407-FL «On amendments to legislative acts of the RF and invalidation of particular provisions of legislative acts of the RF» contains many amendments.
According to the amendments affective as of 28 March, 2016, microfinance organizations will be divided into microfinance and microcredit companies:
Microfinance: The capital requirement is 1 million USD+. Microfinance companies are authorized to raise funds from individual investors in the amount of over 21.000 USD and also to issue bonds.
Microcredit companies are lending entities with capital less than 1 million USD are not permitted to raise funds from individuals, and they can provide loans based on their own funds only.
Positive amendment for SMEs: Credit extended by microfinance organizations to legal entities and sole proprietors are increased to 43.000 USD up from the previous limit of 14.000 USD.
Microfinance and Microcredit are supervised by the Central Bank and amendments to the law provide the Central Bank with greater supervisory powers. The Central Bank is empowered to impose restrictions of activities, accounting standards and to invoke liquidations.
The Federal Law No.407-FL and amendments to the Federal Law of 07.08.2001 No.115-FL includes aspects «On Counteraction of Legitimization (Laundering) Financial Crime and Financing of Terrorism”» and to the Federal Law of 26.10.2002 г. №127-FL as well as «On Insolvency (Bankruptcy)».
The State Register of Microfinance Companies is maintained by the regulator – the Central Bank. As of 1st April, 2016, 3718 microfinance companies have been registered and are active, and 3917 have been excluded from the Register.
This non-banking source of lending is rather popular in Russia: in 2014 microcredits in the amount of about 43 million USD were issued, in 2015 – it reached over 214 million USD. Experts predict further increase in microcredits in 2016 explaining such figures both with decrease in real income of the population and absence of adequate credit market, for obvious reasons relevant to the present complicated financial environment for Russian banks.
All microfinance organizations must submit credit histories to credit history agencies (on February 2016, 21 agency is officially registered and active in Russia).
In the Information and Analytical system Globas-i® http://www.credinform.ru/en-US/globas you may gain insight into the State Register of Microfinance Organizations as well as learn detailed profile (company report) on each microfinance organization registered in Russia.
Source: Credinform Russia
