State Duma tightens rules for microloans issuance

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Deputies of the State Duma have adopted a law in the second and third, final readings, toughening requirements for microfinance organizations (MFOs). This measure is aimed at protecting borrowers from "loan chains" - a situation where clients are forced to take out new loans to repay old ones, increasing their total debt.

In particular, starting from January 1, 2027, MFOs will not be able to approve a new consumer loan for a client if four days have not passed since the full repayment of the previous loan.

From 2027, MFOs will not be able to enter into additional agreements with borrowers that provide for the inclusion in the total debt of the principal amount of the consumer loan of the unpaid debt on interest, penalties, fines, and penalties, as well as other payments.

In addition, the law reduces the maximum amount of all overpayments and penalties from 130% to 100% of the total debt. This means that, taking into account interest, commissions, and penalty fees, the borrower will not pay more than twice the amount of the principal debt.

Furthermore, the law provides for an increase in the maximum amount of a microloan for legal entities or individual entrepreneurs from 5 million rubles to 15 million rubles. The revision of the current limit, which has not been changed since 2018, was explained by the need to expand opportunities for small and medium-sized businesses to attract affordable financing, develop the domestic capital market, and stimulate small business.