In September, Russia experienced a significant decline in credit card issuance and approved limits, with a 17% drop in new credit card approvals compared to the same month last year, as reported by the United Credit Bureau. The total volume of approved limits fell by 16%, marking a consistent decrease in new credit card issuances for the fourth consecutive month.
According to Pavel Samiev, CEO of the analytical agency 'BusinessDrom', two main factors contribute to this trend. Firstly, regulatory changes implemented in the third quarter have tightened lending standards, particularly targeting borrowers with high debt-to-income ratios. Restrictions were introduced for borrowers whose debt-to-income ratio exceeds 80%, aimed at curbing credit card issuance to those in precarious financial situations.
Secondly, banks have observed a deterioration in the financial health of borrowers since summer, leading to stricter risk assessment policies. Samiev indicated that the current statistical trends are likely to persist in the coming months due to these regulatory measures, which will continue to influence credit card limits and approvals.
Despite the decline, there remains a demand for credit among eligible borrowers, although the approval process is becoming more conservative. As of early October, the Central Bank noted a 20% increase in the number of Russians holding three or more loans, totaling over 13 million individuals as of June 2024, with a combined debt of 19 trillion rubles against a retail loan portfolio of 37 trillion rubles.