Banks in Russia are rejecting more consumer loan applications than ever before, approving only 5% of requests in January 2025 compared to 22% the previous year, according to financial marketplace Sravni and Izvestia.
This was reported by the Moscow Times.
This drop in approvals is the lowest in recent years, said Magomed Gamzaev, director of Sravni’s credit department. Major banks have confirmed they are being more cautious about lending, leading to a sharp decline in total loans issued.
According to data from Frank RG, the total amount of loans issued in January 2025, including mortgages, car loans, and personal loans, was 441 billion rubles—the lowest since April 2022.
The Russian Central Bank has made borrowing much more expensive by raising its key interest rate to 21%, the highest in years. Tighter rules on risky borrowers have also made it harder to qualify for loans, according to Alexey Volkov, Marketing Director of the National Bureau of Credit Histories.
With loans becoming more expensive, fewer people are applying, and at the same time, banks are approving fewer applications. In December 2024, the approval rate for unsecured loans had already fallen to 20%, and it has dropped even further in 2025.
Because of the slowdown in lending, banks are investing more money in safer options, such as Central Bank deposits and government-backed securities, according to Ivan Ukleyin, a banking expert at Expert RA.
If interest rates stay high, the situation is unlikely to change anytime soon.
With banks refusing loans, more Russians are turning to payday lenders and unregulated loan providers.
Since mid-2024, many Russians have been forced to take payday loans, which can charge extremely high interest rates—up to 292% per year, according to Gamzaev. Data from Scoring Bureau shows that microloans now make up 70% of all consumer lending, the highest level ever recorded.
Experts warn that if the Central Bank does not address the issue, more people will fall into debt traps by relying on expensive short-term loans or illegal lenders. Elman Mekhtiev, founder of Kredchek, says that Russia’s financial authorities cannot fully control the shadow lending market, which puts many borrowers at risk.
