Microfinance NPLs hit 35 percent as 39 percent of lenders post losses
Russian microfinance institutions saw overdue debt past 90 days reach 35.0 percent in the second quarter of 2026, while 39 percent of lenders operated at a loss. Total sector disbursements rose 2 percent quarter-on-quarter to 490 billion rubles, driven by small business lending.
Diverging paths across lending segments
Total microfinance disbursements reached 490 billion rubles in the second quarter of 2026, rising 2 percent quarter-on-quarter while falling 8 percent year-on-year.
The aggregate portfolio grew to 808 billion rubles, even as loans overdue by more than 90 days climbed to 35.0 percent, marking the highest level since late 2022.
Companies accelerated debt sales to collectors, offloading 43 billion rubles in principal at an average discount of 80 percent.
Lending to businesses surged to 64 billion rubles, up 60 percent from the prior quarter, driven primarily by loans to sellers on e-commerce marketplaces.
Meanwhile, point-of-sale financing dropped 9 percent to 13 billion rubles.
Regulatory squeeze splits the market
Sector profit reached 38 billion rubles in the first half of 2026, with three captive and bank-owned firms generating 40 percent of total earnings.
In contrast, 39 percent of lenders incurred losses, pushing median return on equity down to 2.0 percent.
To offset the April 2026 cap lowering maximum loan overpayment to 100 percent, companies raised non-core fee income to 26 percent of revenue.
Pawnshop portfolios expanded 7 percent to 126 billion rubles, while credit cooperatives contracted 10 percent to 40 billion rubles.
Survival of the deepest pockets
Tighter regulatory caps are driving a harsh shakeout that penalizes independent lenders.
While bank-backed giants pivot to merchant financing and fee bundling, smaller firms are suffocating under bad debt.
The central bank is successfully squeezing out predatory payday credit, but accelerating sector monopolization.