The Share of Young Chronic Debtors in Russia Doubled
OREANDA-NEWS. The share of young people in the total amount of overdue debts of Russians transferred to collectors jumped 2 times over the year to 20% in the first quarter of 2021, according to the National Association of Professional Collection Agencies.
These are borrowers from 18 to 25 years old. Over 6 million Russians have outstanding debts, or one in five. During the pandemic, the number of Russians in credit bondage began to grow 2 times faster. The average amount of overdue debt in 2020 increased by 29.3% to RUB 128 thousand, and in the first quarter of 2021 - by 7.5% to RUB 137.6 thousand. This is a four-year high.
About 80% of debtors come under the control of collectors with one overdue loan, about 15% - two overdue loans, another 3.5% - three, and 1.5% of debtors took more than four loans. Over the year, the number of debtors with two loans increased by 11%.
When servicing one loan, delinquency occurs in 10% of cases, two loans - already 15%, three loans - almost 30%, four - more than 50%.
A new crisis will inevitably come, but the Bank of Russia has the necessary tools to support the economy and the population, said Deputy Chairman of the Central Bank Alexei Zabotkin at the Renaissance Capital conference.
The Central Bank believes that the banks' margin of safety is sufficient to cover possible losses, and there is no need to extend the indulgences adopted against the backdrop of the pandemic. The key rate of the Central Bank is 5.5% per annum.
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