Microloan market cools, Q1 lending falls 7 percent

Microfinance organizations (MFOs) experienced a significant cooling in the first quarter of 2026, with total loan issuance falling by 7 percent to ₽482 billion compared to the previous quarter.

This decline is directly attributed to new regulatory measures.

Specifically, MFOs are now required to use biometric verification for online loan applications, increasing the friction in the lending process.

Additionally, stricter approaches to calculating the debt service-to-income (DTI) ratio have limited the borrowing capacity for many individuals.

In response to these tighter conditions, MFOs have begun to pivot their product offerings, increasingly issuing microloans with credit limits, akin to traditional credit cards.

This strategic shift aims to mitigate operational costs and foster longer-term customer relationships in a more regulated environment.

The microfinance regulatory landscape is undergoing substantial changes.

Since the start of 2026, MFOs are prohibited from using unverified income information for borrowers, demanding greater due diligence.

A further significant restriction takes effect on October 1, 2026, limiting individuals to a maximum of two simultaneously outstanding expensive loans, defined as those with an effective annual interest rate exceeding 200 percent.

This aims to curb excessive indebtedness.

MFOs are proactively adapting by offering credit-limit products.

These typically feature terms of three to five years and average limits just over ₽50,000, allowing companies to navigate new rules while maintaining market presence.