The purpose of this paper is to clarify the present and the challenges of the individual loan business in Russia. Russia is now in the drastic process of transformation from “forced saving” during the socialist era to the consumption society. The average national income per capita has made some 2-digit growth for the recent years and individual consumption accounts for almost a half of the Russian gross domestic product. Individual deposit began to increase and so did individual loan. Individual loan is divided into sales credit for less than three year term, house loan for more than three year term and credit card business. Lending interest for sales credit in Russian rubles is higher than any other loan, which means that those customers are in the weak credit standing.
Russian Standard Bank plays a leading role in sales credit due to the first-mover advantage and its superior strategies. It holds 70 percent of the credit card and almost 40 percent of the sales credit business, and is the number one player in these markets. Strength of this bank is in the risk management of receivables.
Mortgage loan is quite weak in Russia due to underdevelopment of the mortgage institutions. Sberbank, the Russian financial giant, provides customers with non-mortgage house loan with plural sureties and makes a drastic increase in its long-term lending balance. Challenges of the mortgage loan in Russia are to assure mortgage rights and to develop the bond market for mortgage loans.
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