Consumer credit expansion fueled by retail sector gains

Consumer credit expansion fueled by retail sector gains

In April 2025, individual loans surged by a whopping 8.3%, hitting a staggering 667.1 billion rubles, yet still lagging 49.14% behind the same time last year, reports Frank RG. Here's the lowdown on how different loan segments fared:

1. Mortgages: The mortgage market was the clear winner, witnessing a colossal 14.92% increase in issuance to 285 billion rubles, fueled by expanded preferential programs and lower interest rates. Senior Analyst at Frank RG, Ksenia Matenkova, attributes the growth to the extension of the "Family Mortgage" program and symbolic interest rate reductions.
2. Cars: The auto loan industry followed closely, boosting its issuance by 9.68% to 112.8 billion rubles, thanks to innovative financing programs and increased discounts on new Chinese car brands. Head analyst at "Regblock" Anna Avakimyan believes this trend is driven by government support, subsidized programs, and a focus on new cars.
3. Cash Loans: A symbolic 1.88% increase in cash loans to 247.4 billion rubles was reported, although the number of loans issued decreased by 2.71%. Avakimyan attributes the growth to bank risk management tightening and conservative credit limits for clients.
4. POS Lending: The only segment to experience a decline, POS lending plummeted by 1.91% to 21.9 billion rubles. Analysts suggest that the shrinking POS market might be due to regulation changes, increased credit card usage, or The Bank of Russia modifying capital adequacy norms. However, the average check size for POS loans did increase somewhat in comparison to previous months.

Now, let's dive into why loan defaults are on the rise:

Experts believe the decline in the POS lending market could be attributed to changes in regulations and the shift from POS to credit card usage. Yulia Poslavskaya has more details, but it's essential to note that this analysis is based on general trends and not specific to the circumstances of the initial article.

Shifts in Payment Lending: A Wider Perspective

1. Consumer Behavior and Digitalization: As consumers gravitate towards digital payment methods like credit cards, traditional POS lending options may face reduced demand.
2. Economic Factors: Economic conditions shape consumer and business payment choices. Factors like interest rates and broader lending trends can significantly impact consumer preferences in payment methods.
3. Regulatory and Technological Advancements: Fintech advancements and updated regulatory environments may favor credit cards over traditional POS loans. Following this trend, POS loans may be phased out, with credit cards offering more versatility and technological benefits.
4. Availability of Credit and Financial Conditions: The accessibility and terms of credit can sway consumer decisions on which financing option to use. If credit card offerings become more favorable, this could contribute to a shift away from POS loans.
5. Despite a decline in POS lending, businesses in the retail sector might find consumer credit cards more appealing due to digitalization and favorable economic conditions.
6. The mortgage market showed impressive growth, with a 14.92% increase in issuance to 285 billion rubles, surpassing the car loan industry in April 2025.
7. Senior Analyst Ksenia Matenkova attributes the mortgage market growth to the extension of the "Family Mortgage" program and reduced interest rates.
8. The auto loan industry follows closely behind the mortgage market, boosting issuance by 9.68% at 112.8 billion rubles.
9. Yulia Poslavskaya warns that a shift from POS to credit card usage could be the reason for the decline in POS lending, although this analysis does not focus on specific circumstances from the initial article.

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