In the second quarter of 2025, the microloan market saw growth driven by loans with moderate interest rates, where the total cost of credit did not exceed 100% per annum. These loans were mainly new tranches within open credit lines used for buying goods from marketplaces and online stores. At the same time, the share of high-cost microloans dropped to 47.6% of all consumer microloans issued quarterly by microfinance organisations (MFOs), falling below half for the first time.
Microloans provided by MFOs linked to major marketplaces and settlement non-bank credit institutions again surpassed those issued by independent MFOs, marking a reverse trend for the second consecutive quarter.
However, there was a decline in the quality of both corporate and consumer microloan portfolios held by MFOs. The proportion of microloans overdue for more than 90 days increased after previously declining over a long period. This rise was mainly due to more late payments on consumer microloans issued in the last quarter of 2024 and the first quarter of 2025.
Repayment rates also showed challenges: only 11% of all microloans given during this period were repaid in full without borrowers taking out new loans. More than half of total microloans went to borrowers who took another loan after repaying their previous one, leading many into a cycle of debt; in 20% of these cases, their debt amounts grew further. Among borrowers who defaulted, one in four could not make even their first payment because their debt burden was too high. This points to significant household over-indebtedness and indicates that MFOs continue to take substantial risks.
To address these issues, lenders will be required to consider only official borrower incomes when assessing debt burdens. There will also be limits on how many expensive microloans an individual can hold at once and a cooling-off period will be introduced between such loans being issued.
“More details are available in the publication MFO Market Trends in 2025 Q2.”
