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The Market of Microcrediting in Russia and the World

January 2013

Analytical Report (full version)

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Analytical Report (full version)

The Market of Microcrediting in Russia and the World
The Market of Microcrediting in Russia and the World
January 2013

The Market of Microcrediting in Russia and the World

January 2013

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J’son & Partners Consulting presents the study of the Russian and global markets of microcrediting, conducted in January 2013.


Microfinance activity is the activity of legal entities having the status of microfinance organizations, and other entities that have the right to conduct microfinance activities in accordance with Article 3 of the Federal Law №151 on micro-loans (microcrediting (microfinancing)).

Federal Law №151, July 2, 2010

As a rule, microcrediting is used to provide micro-loans for the poorest segments of the population and small businesses which are outside the banking services due to inadequacy to the standards of financing, or perhaps the lack of banking infrastructure in the local areas and activities of the funded entity.

 

The Global Market of Microcrediting

Global microcredit (microfinance) market is growing rapidly. The total amount of loans to the companies engaged in microcrediting (microfinancing), at the end of 2010 amounted to 100 billion USD, and the number of clients of microcredit (microfinance) was about 40 million. Thus, compared to 2006, the global market of microcrediting (microfinancing) grew by 335%.

 

Average loan size can vary from a few dollars to several thousand dollars depending on the country.

 

 

For the period of 2Q2009-3Q2011, the quality of loans issued in the world market has improved, as it is shown in the figure below.

 

 

The Russian Market of microcrediting

Legal and regulatory framework of microfinancing formed in the Federal Law of July 18, 2009 № 190-FL "On credit cooperation" and on July 2, 2010 № 151-FZ "On microfinancing activity and microfinance organizations."

 

The main statements of the law "On microfinancing activity and microfinance organizations", giving the definition of microcrediting (microfinancing) activities, microfinance (microcredit) organizations and microloans:

 

Chapter 1, Article 2 of the Federal Law № 151

"Microfinance activities are activities carried out by legal entities, having the status of microfinance organizations and other legal entities entitled to undertake microfinance activities in accordance with Article 3 of the Federal Law, on microloans (microfinance)";

 

Chapter 1, Article 2 of the Federal Law № 151

"Microfinance Organization is a legal entity registered in the form of a fund, an autonomous non-profit organization, institution (except for budget institution), non-profit partnership, business association or partnership carrying out microfinance activities and included into the state register of microfinance institutions in order stipulated by this Federal Law";

 

Chapter 1, Article 2 of the Federal Law № 151

"Micro loan is a loan provided by the lender to the obligator on the terms stipulated in the contract of loan, in the amount not exceeding one million rubles." Besides, the MFI cannot exceed the amount of one million for all loan agreements which it has concluded with a single obligator (Chapter 3, Article 12 of the Federal Law № 151): MFI cannot: ... lend to the obligator a micro loan (micro loans) if the amount of the obligator’s liabilities to microfinance organization under contracts of providing microloans in the case of the microloan (microloans) exceeds one million rubles.”

 

According to J'son & Partners Consulting estimations, the market of microcredits (microfinancing) in Russia amounted to 7,3 billion rubles in 2011. Thus, in 2012 the market more than doubled to 15,1 billion rubles.

 

The market will keep high growth rates in the period from 2012 to 2017, the average annual growth rate of the market will be 54%.

 

 

The most popular services of microcrediting (microfinancing) are for small towns and rural areas. In 2012, in the total structure of issued microcredits (microloans) to small towns and rural areas accounted for 67% of the total portfolio of issued loans, in megacities (excluding Moscow) for 18%, to Moscow - 15%.

 

According to J'son & Partners Consulting forecasts, the share of microcredits (microloans) to obligators in small towns and rural areas in the five-year term will change slightly and will amount to 66% by 2017, as compared to 67% in 2012.

 

However, the share of microcredits (microloans) to obligators from the cities of millions of people (excluding Moscow) will significantly increase in the five-year term, and by 2017 will be 25% compared to 15% in 2012.

 

The share of loans to obligators from Moscow will be 9% in 2017 compared to 15% in 2012

 

 

Average size of credit regularly increases, in 2012, as it is estimated by J'son & Partners, it will amount to 11.9 thousand rubles. In 2008 the average loan size was 9.7 thousand rubles.

 

According to J'son & Partners Consulting forecasts, the average size of credit will continue to grow and will amount to 14.8 thousand rubles in 2017. Thus, the average annual growth rate of the average loan size will be 4.5%.

 

 

Drivers of the Russian market of microcrediting (microfinancing)

Lack of banking infrastructure in some regions of Russia

Lack of strict rules of credit issuing

Focus on small towns and rural areas, to avoid real competition with banks

Development of the legal framework of microcrediting (microfinancing). With the adoption of the
     Federal Law № 151 "On microfinancing activity and microfinance institutions," a large number of
     micro-credit companies start to enter into the National Partnership of Microfinance Market,
     increasing the transparency of their activitiy and, consequently, increasing the confidence in the
     microcredit (microfinance) institutions.

 

Contents of the full report «The Market of microcrediting in Russia and the World, 2008-2017»

 

1. Summary
2. Introduction
3. Foreign experience of microcrediting
       3.1. Bangladesh
       3.2. Indonesia
       3.3. Bolivia
       3.4. Ethiopia
       3.5. Gambia
       3.6. Madagascar
       3.7. Morocco
       3.8. Nepal
       3.9. Peru
       3.10. The Philippines
       3.11. South Africa
       3.12. Uganda
       3.13. Brazil
       3.14. Poland
       3.15. Hungary
       3.16. USA
       3.17. Canada
       3.18. India
       3.19. Sri Lanka
4. The Russian Market of microcrediting
       4.1. Main market indications
       4.2. Moscow
       4.3. Other cities with the population of millions of people
       4.4. Small towns and rural areas
       4.5. Trends, forecasts and prospects of the market of microcrediting (microfinancing) in Russia
5. Major participants of the Russian market of microcrediting
       5.1. Domashnye dengi
       5.2. Mig-credit
       5.3. Dengi naprokat
       5.4. Djet Mani
       5.5. Nano-Finance
       5.6. Platiza.ru
6. Conclusion

 

List of Figures

Fig. 1. The Global Market of microcrediting, billion USD, 2006-2011
Fig. 2. Percentage of written off, refinanced or overdue microcredits issued in the global market, Q2 2009 - Q3 2011
Fig. 3. The Russian market of microcrediting, billion rubles, 2008-2017
Fig. 4. The global market of microcrediting billion USD, 2006-2010
Fig. 5. Percentage of written off, refinanced or overdue microcredits issued in the global market, Q2 2009 - Q3 2011
Fig. 6. The Russian market of microcrediting, billion rubles, 2008-2017
Fig. 7. The average annual rate of the credit, 2008-2017
Fig. 8. Average amount of credit, 2008-2017
Fig. 9. Average term of credit, 2008-2017
Fig. 10. Regional structure of the market of microcrediting (microfinancing), 2008-2017
Fig. 11. Technologies of issuing of microcredits (microloans), 2008-2017
Fig. 12. Channels of issuing of microcredits (microloans), 2008-2017
Fig. 13. Overdue rate, 2008-2017
Fig. 14. Average age of the credit obligator
Fig. 15. Average amount of money of overdue
Fig. 16. The market of microcrediting, Moscow, billion rubles, 2008-2017
Fig. 17. The market of microcrediting (microfinancing) in the cities with the population of millions of people (except Moscow), billion rubles, 2008-2017
Fig. 18. The market of microcrediting (microfinancing) in small towns and rural areas, billion rubles, 2008-2017 
Fig. 19. The number of obligators, using the services of microcrediting, th. people, 2008-2017
Fig. 20. The market structure of microcrediting, 2008-2012
Fig. 21. The Russian market of microcrediting, billion rubles, 2008-2017

 

List of Tables

Table 1. Advantages and disadvantages of microcrediting (microfinancing)
Table 2. Stages of development of corporate movement «Dejarden», 1900-2008
Table 3. Microcrediting tariff «Special», Nano-Finance
Table 4. Microcrediting tariff «Pensionary», Nano-Finance
Table 5. Microcrediting tariff «Optimal», Nano-Finance
Table 6. Microcrediting tariff «Convenient», Nano-Finance
Table 7. Microcrediting tariff «VIP», Nano-Finance

 

 

This Information Note is Prepared by J’son & Partners Consulting, We strive to provide factual and prognostic data that fully reflect the situation and are available to us before issuing the material. J’son & Partners Consulting reserves the right to revise the data after publication of new official information by the market players.

 

 

J’son & Partners Consulting presents the study of the Russian and global markets of microcrediting, conducted in January 2013.