Lending to business (legal entities) in Russia

Main article: Lending in Russia

2024

Of the 74 trillion ruble loans of legal entities, non-financial organizations account for 61.8 trillion

According to the results of 10 May 2024, the total volume of ruble loans to legal entities is 74 trillion rubles, an increase of a whopping 24.8% or 14.7 trillion rubles over the year, since February 22, lending has increased by 34.5 trillion rubles.

In the structure of total loans of legal entities

• IP accounts for 1.3 trillion (+ 0.2 trillion per year and + 0.6 trillion from the beginning of 2022, i.e. almost doubling in 2.5 years),
• financial institutions have 10.3 trillion loans (+ 2.5 trillion per year and + 4.2 trillion from the beginning of 2022),
• and non-financial organizations - 61.8 trillion (+ 11.9 trillion per year and + 29.7 trillion from February 22).

Non-financial organizations in the period 2017-2019 had an average monthly growth rate of lending of 0.5%, in 2020-2021 the rate was 1.16%, from Aug. 22 to Aug. 23 the acceleration of lending to 2.32% per month, from Sen.23 to June 24 the rate decreased to 1.56% and again sharp intensification to 2.74%.

The pace of lending to legal entities in Russia remains extremely high due to the replacement of foreign loans

In August 2024, lending to legal entities (non-financial companies + financial organizations with the exception of banks) increased by a record 1.53 trillion rubles, which is significantly higher than Aug. 23 (1.13 trillion), Aug. 22 (1.25 trillion) and on average only + 0.3 trillion in August 2019-2021.

The current loan portfolio is estimated at 82.9 trillion rubles, of which about 70 trillion are ruble loans.

Approximately 85% of corporate loans in the structure of the total portfolio are ruble loans, and this share is gradually increasing. For example, in 2016 the share of ruble loans was 64.2%, in 2019 - 75.3%, in 2021 - 75.5%, in 2023 - 83.5%.

If foreign currency loans are excluded, before the conflict in Ukraine, corporate ruble loans were 40 trillion, at the beginning of 2023 - 49.5 trillion, at the beginning of 2024 - 61.9 trillion, and now over 70 trillion, that is, since the beginning of 2022, more than 30 trillion loans have been created!

The context of the conditions should be taken into account - a blocked external capital market. Previously, there was an opportunity to accumulate external debt at low rates, now they have not only blocked funding, but even refinancing, which forces business to repay external debt at a record pace.

It turns out that the financing gap is closed exclusively with ruble loans, apparently at any rates, since we are talking about business survival.

In addition to financing working capital, operational and investment activity, it is necessary to close cash gaps in external debt. The debt capital market in Russia is practically frozen, bank loans remain, which is why such high growth rates, Spydell Finance wrote.

In October 2024, the net increase in loans to Russian legal entities reached an absolute record of 1.9 trillion rubles per month, updating the record in July 24 (1.82 trillion).

Since the beginning of the year, the net increase in lending amounted to 12.5 trillion vs 9.5 trillion rubles for the same period a year earlier.

This is a lot, because for the whole of 2023, lending to legal entities increased by 12.3 trillion (then it seemed an incredible pace), in 2022 - 7.3 trillion, in 2021 - 5.5 trillion, and in 2020 - 4 trillion. In the fall of 2024, the same number of loans are issued in a couple of months as in the whole of 2020.

Even in relative comparison, lending growth is incredible - 2.3% m/m (in the area of ​ ​ highs since 2009), for 3 months the impulse corresponds to 25.3% per annum, and for 10m24 an increase of 17.1% vs 16.1% over 10m23.

The total volume of loans to legal entities amounted to 86.1 trillion rubles (in rubles and in foreign currency), including non-financial organizations - 73.3 trillion, financial organizations - 11.5 trillion, individual entrepreneurs - 1.3 trillion.

Long-term interest rates on loans to non-financial businesses reach record levels

Corporate loans for more than 3 years had weighted average rates of 15.1% in April 2024 (since the beginning of the year on average 14.1%), and the higher cost of loans was only once (at least over the past 20 years) in March 2015.

These data take into account newly issued loans, both within the framework of refinancing and for new loans, therefore, the information allows you to estimate the current cost of bank borrowing.

In the period from January to July 2023 (before the tightening of the monetary policy), the weighted average rates on long-term loans were 8.4% - the average positive spread to the key rate is about 0.9 pp, and to the 10-year OFZ a negative spread of 2.4 pp. At the beginning of 2024, there was an inversion, to the key rate minus 1.9 pp, and to the 10-year OFZ + 1.7 pp.

Medium-term loans from a year to three years had a rate of 14.8% in April 24 (from the beginning of the year - 15.4%) due to preferential state loans.

Short-term loans before the year had a 17.1% value of Apr. 24 (from the beginning of the year - 17%), relative to the key spread rate on average about + 1 pp since the beginning of the year compared to the spread + 2.1 pp in Jan-Jul. 23.

This means that the transmission of monetary policy into the credit market occurs with minimal delays and in full compliance with the trajectory of the key rate of the Bank of Russia, and the potential margin of banks is lower than it was before tightening, which in the future will affect the profits of banks.

The weighted average rate on loans gradually increases as the cost of funding from banks increases.

These data are in April, and since May there has been a tendency to tighten financial conditions in the market without actual tightening from the Bank of Russia, so we can expect continued growth in the cost of corporate loans, Spydell Finance wrote.

New records: the volume of the loan portfolio of legal entities increased to 76 trillion rubles

In March 2024, the increase in lending to legal entities amounted to 1.32 trillion rubles, which exceeds the previous record in March 2023 by 42%, and in the first quarter an increase of 1.73 trillion, which is also a historical record (+ 4.2% to 1q23). The volume of the loan portfolio of legal entities has grown to 76 trillion.

The phases of accumulation and distribution of liquidity and investment cycles in Russia imply an increase in lending rates at the end of the year, so such a strong jerk at the beginning of the year is abnormal, Spydell Finance wrote. For comparison, for the 1st quarter in 2023 - 1.66 trillion, in 1Q22 - 1.08 trillion, 1Q21 - 0.38 trillion, 1Q20 - 0.76 trillion.

Over the past 12 months, lending to legal entities has grown by 12.4 trillion rubles, which is close to the maximum for all time. For comparison, until 2022, the annual growth rate was 4-6 trillion rubles.

From September 2023 (the cycle of tightening the monetary policy began to operate in full) to March 2024, the average monthly growth rate of lending amounted to 1.07 trillion vs 0.8 trillion from January to August 2023 and 0.87 trillion from Sen.22 to March 23.

With any consideration after the tightening of the monetary policy, lending is growing at a faster pace than before the tightening.

In these loans there is a non-financial corporate sector and financial organizations (any financial structures with the exception of the Central Bank and banks), both for foreign currency and ruble loans.

There is no data for March on the lending structure, but if we estimate it for February, with the loan portfolio at 74.6 trillion, ruble loans accounted for 62.1 trillion, and foreign exchange loans - 12.5 trillion. In the total portfolio for non-financial organizations - 62.8 trillion (51.7 trillion rubles + 11.1 trillion foreign currency), and for financial organizations - 10.1 trillion (8.8 + 1.3 trillion).

In March, the increase in lending was provided by transport, oil and gas companies and developers as part of project financing for housing construction. High demand was associated with the need to pay taxes (VAT, VAT, income tax).

More than six months after the tightening of the monetary policy, the reaction is still the opposite - the acceleration of lending.

Corporate liabilities in Russia fell to 73% of GDP

The BIS data includes the debt of non-financial companies in loans and bonds to internal and external investors (external debt), both in national and foreign currencies. These do NOT include payables, trade credits and advances, derivatives, equity and other liabilities.

In absolute terms, the most significant dollar-denominated liabilities per Q1 2024 in the following countries:

• China - 25.1 trillion
• US - 21.3 trillion
• Eurozone - 15.1 trillion, where Germany - 3.16 trillion, France - 4.56 trillion, Italy - 1.42 trillion, Spain - 1.29 trillion
• Japan - 4.63 trillion
• Canada - 2.53 trillion
• Britain - 2.16 trillion
• South Korea - 2.03 trillion
• India - 1.98 trillion
• Russia - 1.43 trillion
• Switzerland - 1.26 trillion
• Brazil - 1.14 trillion
• Hong Kong - 1 trillion
• Australia - 1 trillion

Relative to GDP, Russia's corporate debt is 73.8%, having decreased by 2.4 pp in two years.

The debt burden in Russia turned out to be almost comparable to the United States - 76.8% of GDP, but higher than many Western countries, such as Britain - 63.4%, Germany - 69.3%, Italy - 62.6% and Australia - 60.3%.

Given interest rates and limited access to funding resources, the situation in Russia is quite difficult, since Western countries have access to global capital and rates 4-5 times lower, Spydell Finance wrote.

Among developing countries, China has the largest debt burden - 142.5%, Malaysia - 89.5%, Thailand - 85.9%, India - 55.8% and Brazil - 52.1%.

Comparing 1q24 with 1q19 (over 5 years), Korea has the largest increase in debt relative to GDP - 20.5 pp, Switzerland - 18.9 pp, Japan - 17.4 pp, Saudi Arabia - 13.2 pp, China - 11.2 pp and Thailand - 10.4 pp

The largest reduction in debt in the Netherlands - 40.5 pp, Belgium - 22.2 pp, Spain - 14.9 pp, Britain - 7.4 pp, Italy - 6.2 pp For all countries of the Eurozone, a reduction of 5.8 pp, and in the United States - 1.9 pp.

Reducing the debt burden on corporate debt concerns not only the United States, but also most of its allies, and debt burden is expanding in developing countries.

49% of loans to legal entities issued at a floating rate

Half of all ruble loans have floating rates, which makes the Russian economy vulnerable in the face of a tough monetary policy.

The Bank of Russia estimates the total volume of ruble lending at 67.6 trillion rubles as of March 1, 2024 (non-financial business, including SMEs, individual entrepreneurs and financial organizations, with the exception of banking structures).

In this debt, 33.5 trillion is concentrated in debt with a floating or variable rate, and there is a tendency to increase debt with a floating rate.

In 2019, on average, 30% of the total debt was with floating rates, in 2020 - 34.1%, in 2021 - 37.8%, in 2022 - 41.3%, in 2023 - 46.4%, and at the beginning of 2024 already 49.6%, while a year earlier in early March it was 45%.

Before the tightening cycle of the monetary policy in August 2023, the share of loans with floating rates was 45.8%, by December increased to 48.2%.

Over 90% of floating-rate debt is directly linked to the Bank of Russia key rate and CS derivatives as part of the money market, i.e. current debt is quoted at least 16% or higher, since risk surcharges are usually applied to the CS.

The review of market weighted average rates on the non-financial sector demonstrates a high dependence of the credit market of the Russian Federation on money - there is neither lag nor buffer, as in the United States, where American banks had the opportunity to raise credit rates more slowly and less intensively than market rates in the money market.

Sustainability resource - accumulated cache position, high margin and/or high business growth rates, but this resource has a very small percentage of companies, Spydell Finance wrote.

2023

Record increase in ruble loans of non-financial companies by 9.8 trillion rubles to 51 trillion rubles

Ruble lending to non-financial organizations in Russia is updating records, the intensity of debt growth has increased sharply after the start of the cycle of tightening the monetary policy from August 2023.

The increase in ruble loans of non-financial organizations in 2023 amounted to 9.8 trillion (volume of issuance minus repayment), which is an absolute record vs 9 trillion in 2022 and 2 trillion in 2021.

For financial institutions (any financial institutions with the exception of credit), the increase in ruble loans amounted to 2.1 trillion vs 0.3 trillion in 2022 and 1.3 trillion in 2021.

Accordingly, for legal entities outside the banking system, the increase in lending in 2023 is 11.9 trillion vs 9.4 trillion in 2022 and 3.3 trillion in 2021.

The loan portfolio of non-financial organizations is estimated at 51.4 trillion rubles, which is 18.7 trillion or 57% higher than the level before the conflict in Ukraine.

For non-financial organizations, the average monthly increase from January to July 2023 was 0.8 trillion, and from August to December 2023 it slightly increased to 0.84 trillion rubles, while for financial organizations the pace increased significantly from 71 to 316 billion rubles.

For legal entities (non-financial + financial organizations), the average monthly growth rate of ruble loans increased from 869 billion to 1.2 trillion rubles.

As you can see, there is no reaction of the economy to the monetary policy of the Bank of Russia.

Average lending rates are distorted by large borrowers, subsidized loans and restructuring.

How does the Central Bank explain the record increase in lending?

• Replacement of external debt - 2.5 trillion rubles.
• Merger and acquisition operations to finance the redemption of foreign property shares at a discount - only 0.5 trillion rubles (in reality, probably many times more).
• Project financing of housing - 1.4 trillion rubles.

One of the reasons for activity at the end of the year is cash gaps in operating activities and financing of working capital for future budget payments (contracted, but not received by companies).

2022

The solvency of individual entrepreneurs continues to decline

Individual entrepreneurs stop paying for. bank to the credits For 10 months of 2022, total overdue debt increased by 3.6% or 989 million. rubles This was announced on December 27, 2022 by the company. Debt Advisor (Doc) After the first months of the credit holidays in June-July, on the contrary, it declined, steady growth began in August. As of December 2022, banks reflected 28.3 billion rubles of problem loans issued to entities small and medium-sized businesses in the status of individual entrepreneurs. Such conclusions were reached by analysts of the Dolgovoy Consultant collection agency.

The total loan portfolio of individual entrepreneurs (debt on bank loans) since the beginning of 2022 has grown by 9% and exceeded 714 billion rubles. The share of problem debt as of December 2022 reached 4% on average in the country.

In general, the level of overdue debt of 4% for individual entrepreneur loans is insignificant, which indicates the good quality of portfolios on bank balance sheets, "said Denis Aksyonov, General Director of the Debt Consultant collection agency. - But unlike business loans issued to limited liability companies, an individual entrepreneur answers all his property, including personal ones - with machines and apartments. Mistakes in business planning lead to personal family tragedies.

Since the beginning of the year, a significant increase in non-payments on individual entrepreneur loans has occurred in the Novosibirsk region (3.8 times), Sevastopol (2.3 times), Kaliningrad region (1.8 times), and the Republic of Khakassia (1.5 times). The largest decrease is in the Omsk region and the Republic of Ingushetia (the problem portfolio decreased by 1.5 times), Khabarovsk Territory (1.4 times), the Republic of Adygea (1.3 times).

The largest volume of overdue non-payments by individual entrepreneurs is in Moscow and the Moscow region (2.6 and 2.4 billion rubles, respectively), Krasnodar Territory (1.5 billion), Novosibirsk (1.2 billion) and Rostovskaya (1.1 billion) regions.

At the same time, since the beginning of the year, the number of new registered individual entrepreneurs in the country has increased by 5%, which expands the range of potential borrowers for banks and can help banks with an increase in lending volumes to reduce the share of overdue non-payments, "said Denis Aksyonov. However, the moratorium on the bankruptcy of individual entrepreneurs has ended, the credit holidays have not been extended, in addition, legislators are talking about changing tax rates - these factors can accelerate the growth of non-payments in the segment of individual entrepreneurship.

The table for all indicators with distribution by region is available at the link.

Corporate lending boom amid special operation in Ukraine

In August, September, October 2022, corporate lending in Russia is growing at an unprecedented rate of 2.4% per month - this is about 1.3 trillion rubles.

There was a risk mid-year that corporate lending would shrink for the first time since 2016, but not this time.

In March-June, corporate lending was frozen, but from July the situation began to correct, and from August the strongest credit boom was launched. As a result, from January to October 2022, lending growth is 5.4 trillion rubles (10.7% YoY) compared to 4.6 trillion (9.7% YoY) for the same period in 2021. The annual pace (October 2022 to October 2021) is 12.8%, which is slightly better than 2021.

The most interesting thing is the three-month pace, when almost 4 trillion loans were created, and almost all in rubles. At face value, this is the best performance ever with the exception of currency revaluation, and in relative measurement the best result in 15 years.

Operational normalization of financial conditions and a decrease in the key rate acted as a trigger for a credit boom.

Unfortunately, the Central Bank does not decipher the structure of lending and does not make a sectoral breakdown, so there is no documentary evidence about the sources of origin of such an impulse. One can only assume.

The Bank of Russia itself comments on this in the context of replacing external sources of funding and high demand for construction companies in the amount of up to 200 billion per month, while out of 4 trillion in growth, state support is only 135 billion.

However, how much is given under state guarantees and "its" companies in the quasi-state segment? As the telegram channel Spydell Finance suggests, the main increase was under state guarantees in the military-industrial complex and related industries.

In the first 11 months of 2022, lending to legal entities increased by 6 trillion compared to 4.9 trillion in 2021 and 5.5 trillion at the end of 2021, and all the main increase occurred from July to November, when the average monthly growth rate was an incredible 1 trillion rubles compared to 460 billion in 2022.

In November, an increase of 0.6 trillion (a slowdown of two times compared to August-October), but this is higher than the pre-crisis pace. The rapid growth in lending is largely due to the replacement of external funding, which is blocked a little less than completely.

The three-month increase in lending from 30% (close to the highest pace in 15 years) decreased to 24%, compared with 13-15% at the end of 2021.

Capital companies received soft loans for more than 170 billion rubles

The volume of approved applications for preferential loans, which from March 2022, as part of anti-crisis support, enterprises and investors implementing non-residential construction projects in the capital can receive from the city, exceeded 170 billion rubles. This was announced on September 8, 2022 by the Deputy Mayor of Moscow for Economic Policy and Property and Land Relations Vladimir Efimov.

The program of concessional lending to enterprises, adopted in 2022 by decision of Mayor Sergei Sobyanin, made it possible to support the industry in a difficult period. The Moscow Industry and Entrepreneurship Support Fund allocated 20 billion rubles from the budget for concessional lending to replenish working capital, investment purposes, and the construction of non-residential real estate. As a result, the amount of approved applications exceeds 170 billion rubles. 65 enterprises where more than 60 thousand people work took advantage of the support, - said Vladimir Efimov.

Among industrial enterprises, manufacturers of food, cosmetics, waste processing companies and other industries turned for support.

Moscow continues to stimulate the growth of investments enterprises in industrial infrastructure and the modernization of production lines. In July, the rate on preferential investment loans was reduced to three percent, and the maximum loan size was increased to three billion rubles. The measure is popular with metropolitan producers. At the beginning of September 2022, applications for soft investment loans for the construction of industrial infrastructure for another 12 billion rubles are in the works, - said the head. Department of Investment and Industrial Policy Vladislav Ovchinsky

The share of "zombie companies" in Russia has tripled. Their profits are not enough to service debts

By the end of 2020, there were 5.92 thousand "zombie companies" in Russia against 2.11 thousand in 2016. Such data at the end of April 2022 were published by experts from the National Credit Ratings agency (NKR, part of the RBC group) and the Rescore counterparty scoring system. Read more here.

Total overdue debt of individual entrepreneurs increased by 27%, exceeding 28 billion rubles

On March 16, 2022, the company Debt Advisor (Doc) announced that the total overdue debt of individual entrepreneurs bank to the credits as a whole for RUSSIAN FEDERATION the year increased by 27%, exceeding 28 billion. rubles The average per capita problem debt for each registered individual entrepreneur increased by 19%, to 7.9 thousand rubles. Attention to the debts of individual entrepreneurs is caused by the fact that, unlike other forms of doing business (LLC, PJSC or JSC), they are responsible for them to creditors with all their personal property, including recovery in some cases can be imposed on a single housing (with the provision of alternative). Such conclusions were reached by analysts based on the study of statistics, and the Bank of Russia FEDERAL TAX SERVICE OF THE RUSSIAN Judicial Department at. Supreme Court of the Russian Federation

The leader region, in which from January 2021 to January 2022 the volume of overdue bank loans increased sixfold, was the Novosibirsk region (it accounts for 2.2% of the all-Russian number of individual entrepreneurs). The volume of problem debts increased 3.5 times in the Tomsk region (0.6%), 2.7 times in Moscow (10%), and 2 times in the Arkhangelsk region (0.7%).

The growth rate of problem debts has accelerated and is actually twice the growth rate of the number of existing individual entrepreneurs, - explained Denis Aksyonov, General Director of the Debt Consultant collection agency. - Our assessment is based on data on bank loans, and any individual entrepreneur who has problems with business has problematic debts to suppliers and budgets, and in the aggregate this is a completely different situation.

Regions leading in the dynamics of the growth of overdue debts of individual entrepreneurs

According to the Judicial Department at the Supreme Court of the Russian Federation, in the first half of 2021, federal arbitration courts for completed bankruptcy cases of individual entrepreneurs approved the amount of debts for 40.6 billion rubles for collection, a total of 7.2 thousand cases were in production. The initiator of bankruptcy, as a rule, in the overwhelming majority of cases is the IP creditor, including state bodies represented by the Federal Tax Service of the Russian Federation.

Experiencing problems in business, an individual entrepreneur often tries to solve them by obtaining consumer loans designed for himself as an individual. Therefore, in fact, the overdue debts of individual entrepreneurs turn out to be more, their problems are deeper, - added Denis Aksyonov. - In the context of the legislation, when the termination of the activity of an individual entrepreneur does not exempt him from the repayment of the formed debt, the recovery is sent to the personal property of the former or retained the status of the entrepreneur.

The government has allocated more than 6 billion rubles to support the program of concessional lending to business

The Russian government continues to implement measures to support the economy. Over 6.2 billion rubles will be additionally allocated to finance the program of concessional lending to business "PHY 3.0." Such an order (No. 427-r) was signed on March 5, 2022 by Prime Minister Mikhail Mishustin.

Federal subsidies will be sent to banks that provided business with preferential loans in 2021. At the expense of these funds, credit institutions will continue to compensate for lost income in 2022.

Mikhail Mishustin announced the decision to allocate funds at a government meeting on March 2.

At the end of 2021, more than 42 thousand loans were issued. The business received almost 150 billion rubles, - said Mikhail Mishustin.

The PHY 3.0 concessional business lending program was launched in 2021 to restore entrepreneurial activity and maintain employment. With its help, enterprises and organizations from the industries most affected by the were able to receive loans at 3% per annum. pandemics The key condition for participating in the program is that companies need to keep the number of employees at least 90%. This indicator is controlled through data FTS^[1]

2020

The first loan secured by intellectual property was issued in Russia

On September 4, 2020, it became known about the issuance of the first loan in Russia secured by intellectual property. As part of the transaction, SME Bank provided 4.29 million rubles at 8.5% per annum to battery manufacturer Energoelement on the security of two patents: for a lithium-ion battery and a charger for it. Read more here.

Russian companies affected by coronavirus will be written off loans

Loans issued for the resumption of the activities of companies affected by the coronavirus and retaining at least 90 percent of employees may be considered hopeless for collection. The corresponding law was adopted by the State Duma in the third final reading. This became known on June 8, 2020.

In addition, monetary obligations terminated to the taxpayer on the payment of debt under the loan agreement will be written off. However, this is possible only if the loan is provided to legal entities or individual entrepreneurs in the period from January 1 to December 31, 2020 for the resumption of activities or for urgent needs to support and maintain employment.

Business in Russia is provided with all kinds of support measures in the context of the coronavirus pandemic. Among other things, banks began to issue interest-free loans to companies for salaries to employees, and also provided SMEs with the opportunity to arrange credit holidays. In addition, more than 200 thousand planned business inspections in 2020 were canceled in the country, and unscheduled inspections will have to be coordinated with the Prosecutor General's Office.

Support for entrepreneurs is provided for by the national project "Small and Medium Enterprises," which is being implemented in Russia at the initiative of President Vladimir Putin. It assumes an increase in the number of people employed in the field of small and medium-sized enterprises, including individual entrepreneurs, to 25 million people by the end of 2024, an increase in the share of SMEs in the country's GDP to 32 percent and the share of exports of SMEs - to 10 percent of the total by 2024. In total, it is planned to allocate more than 481 billion rubles for the implementation of the project. ^[2] will be ^[3].

Banks in Russia began to exchange data on the accounts of legal entities

On May 25, 2020, it became known that banks in Russia are beginning to exchange data on accounts of legal entities. This should make it easier for companies to obtain loans.

The online service for the direct exchange of information about legal entities' accounts using Open API technology has been launched at the FinTech Association (AFL), created by the Central Bank. By May 25, 13 banks are participating in the project, Igor Ramazanov, head of the Open API department at AFL, told RBC.

Banks decided to exchange information about the accounts of legal entities online using the technology of open software interfaces

According to him, at the first stage, data exchange will be used in the process of online lending to customers, but the AFL does not restrict banks in channels (online or offline) through which they will be able to request the client's consent to receive data.

The representative of Tochka Bank told the publication that in the future customers will also be able to use the technology for regular data exchange in order to undergo checks on compliance with "anti-washing" legislation. Statements can also be used for the reporting code in online accounting or other services.

The representative of the Central Bank of the Russian Federation noted RBC that by the end of May 2020, the use of the technology is advisory in nature.

Based on the results of the assessment of pilots conducted by AFT participants, the Bank of Russia and federal executive authorities will consider the issue of regulating the process of using open APIs by banks, he said.

Fintech participants approved the concept of open program interfaces in August 2019. At the same time, the association warned that at the time of implementation of the technology, additional costs could arise. In addition, expansion to the entire market will require banks as  a whole to be much more efficient. At the same time, this technology will give a new impetus to the development of the Russian financial market, in particular, will contribute to the development of healthy competition, the emergence of better and more customer-oriented products and services, the association is confident. ^[4]

Lending to legal entities in Russia in March increased by a record 1 trillion rubles

In March 2020, banks in Russia issued loans to companies totaling 1 trillion rubles, which was a record figure, the Central Bank of the Russian Federation reported on April 23.

The corporate portfolio of credit institutions in March 2020 grew by 2.6%. For comparison, for the whole of 2019, the figure increased by 5.8%.

The corporate loan portfolio of Russian banks rose record in March

The largest banks in March 2020 showed an increase in corporate loans slightly below the market (+ 2.1%), while the portfolio of corporate loans of other market participants from among the 100 largest grew more (+ 5.5%).

According to the regulator, the peak of loans to legal entities fell on the last week of March, which may be due to the need to compensate for the falling cash flows of companies, especially during the announced non-working week, to pay current expenses (including salaries, rent and taxes).

The Central Bank also linked the surge in business credit activity with a decrease in activity in the bond loan market. In March, the volume of corporate bonds in circulation grew by only 60 billion rubles against an increase of 230 billion rubles in February 2020. In addition, the March increase is due to the expectation of companies to increase interest rates on loans and tightening the conditions for their issuance in banks.

According to the results of the third calendar month in 2020, the share of overdue debt on the corporate portfolio in Russia practically did not change and amounted to 6.8%, the share of loans of the worst quality categories in the portfolio remains at a high level - 11%. Coverage with total reserves for corporate loans is 90.7%.

The Bank of Russia notes that given the difficult economic situation, an increase in delinquency and problem loans in the medium term is expected.

However, this growth will most likely be smoothed out, since a significant amount of loans from affected borrowers will be restructured within the framework of banks' own programs or credit holidays provided for by law, the Central Bank believes.[5]

Companies in Russia began to issue loans at 0% to pay salaries to employees

In April 2020, Russian banks began issuing loans to the company at 0% to pay salaries to employees. As part of business support, the Central Bank allocates 150 billion rubles to subsidize interest rates to Sberbank, VTB, SME Bank, Promsvyazbank (PSB), Gazprombank and Otkritie Bank.

According to PSB on April 13, 2020, the bank received more than 1,000 applications for loans at a zero rate for paying salaries. Money to the account can be obtained remotely within 24 hours after submitting an application on the bank's website for two documents, for a period of six months and an amount of up to 3 million rubles. Such a loan is available to both PSB salary clients and other entrepreneurs.

Russian banks began to issue loans to companies at 0% to pay salaries to employees

Sberbank decided to issue state-subsidized loans to pay salaries only to companies with a salary project in the bank. The loan is issued for a period of up to 12 months with the provision of a deferral of the principal for 6 months, while the loan rate is 0% for a period of 6 months. After six months, the rate rises to 4%. The total loan amount in Sberbank is taken into account with reference to the minimum wage.

Concessional loans also began to issue VTB and SME Bank. The conditions there are different: for example, you can take a loan from VTB for no more than 6 months.

Prime Minister Mikhail Mishustin said that the maximum loan under this state program will be determined based on the number of employees, the minimum wage per six months.

The Ministry of Economic Development is considering the possibility of expanding the list of banks that will be able to participate in the program for issuing loans with a subsidized interest rate. ВЭБ.РФ will take over 75% of the warranty coverage. It is assumed that these funds will cover a six-month minimum wage of 1.5 million employees.^[6]

2018: Export credit growth plans

According to forecasts of the Russian budget for October 2019, annual export lending will almost double by 2022 - to $6 billion, which is the highest level in modern Russian history. Against the background of China, not so much. Beijing has invested $23 billion in energy projects abroad alone.

2017

Only 10% of individual entrepreneurs have loans

According to the United Credit Bureau in 2017, in general, the coverage of individual entrepreneurs with retail lending is at a very low level. No more than 10% of individual entrepreneurs registered in Russia have open loans. Among the rest of the economically active employed population of the country, more than 60% of citizens have loans.

At the same time, the credit load of individual entrepreneurs is very high. For each borrower-individual entrepreneur, there are an average of 2.7 open loans with a total debt of more than 2.2 million rubles. For comparison, the average Russian borrower has 1.7 open loans and owes the bank 10 times less - about 210 thousand rubles.

The most popular credit product among individual entrepreneurs is cash loans - almost 63% of IP borrowers have such a loan. 15% have a secured loan, 9.2% have open credit cards, 8.9% have a mortgage, 4.3% have a car loan.

Most often, entrepreneurs aged 40-49 take loans. Their share is 36.3% of the total number of borrowers-individual entrepreneurs, least often individual entrepreneurs under the age of 25, their share does not exceed 0.2%.

The high credit burden of individual entrepreneurs is also reflected in their payment discipline. According to OKB, 26.5% of IP borrowers do not pay on their loans on time. 21% of them are in default, that is, they did not make payments on their loans for more than three months.

For comparison, among all individual borrowers with open accounts, the share of borrowers in default is about 15%.

Individual entrepreneurs traditionally belong to the category of not the most "favorite" borrowers for banks. This is due to the fact that in the existing economic realities, IP revenues are not always stable and often difficult to predict for the lender. Entrepreneurs often take out a loan in order to develop their business, and in case of failure, most likely, they will not be able to fulfill their obligations, and it will be difficult for a lender to collect a debt from such a borrower.

In addition, the array of data accumulated by banks and BKIs indicates a high level of debt burden of borrowers-individual entrepreneurs, as well as a rather poor payment discipline compared to average borrowers-individuals.

Data from NAFI and RT-Capital: payables of large and medium-sized companies have grown 6.1 times over 10 years

In 2017, the National Agency for Financial Research (NAFI) conducted a study of the accounts Rostec market of Russian medium and large businesses by order of RT-Capital (Rostec structure).

The results of the study showed that the total debt on the obligations of large and medium-sized companies over 10 years has increased significantly, increasing from 2007 to 2017 by 6.1 times (from 15 to 92 trillion rubles). Until 2016, the growth rate of accounts payable was a record for the Russian economy. In 2015, this figure grew by 21%, in 2014 - by 20%, in 2013 - also by 20%. And only since 2016 has there been a slowdown in the annual growth of debt.

At the same time, the share of overdue accounts payable decreases from year to year: if in 2007 it amounted to 5.9% of all debt, then in 2016 - already 3.2%.

Debt on bank loans provided to legal entities and individual enterprises of medium and large businesses more than doubled in 2010-2017. from 12.7 trillion rubles to 39.8 trillion rubles.

Industry analysis of the indicator indicates that loans are most in demand in the manufacturing industry (debt as of February 1, 2017 amounts to 6.3 trillion rubles). And the level of overdue debt here is below average and is 5%. The most problematic industries are construction (23% delay), wholesale and retail trade and services (12%).

NAFI data also indicate that in 2016, 12,431 medium and large businesses entered bankruptcy proceedings. Of the major bankruptcies, the financial sector that has not recovered from the crisis prevails. Second place in vulnerability in the trade industry.

level of debt of enterprises of medium and large businesses, as well as an increase in the number of delinquencies and bankruptcies, is a consequence of macroeconomic problems and crisis factors, which were especially pronounced in the industrial sector," comments Sergey Ivanov, General Director of RT-Capital. - NAFI data confirm the need to improve economic conditions and make this environment more comfortable for business. Our parent corporation Rostec is systematically working to develop the country's industrial potential, and is actively introducing innovations. In the context of a stable and projected economic perspective, the efforts of the corporation and the large and medium-sized business sector as a whole will give a synergistic effect, which will be directly reflected in the financial results of market companies and the country as a whole. "

Notes