Record surge in microloans in Russia: debt is driving people to war
Since the beginning of the full-scale invasion of Ukraine, russians have sharply increased the number of microloans. Last year, the volume of loans from microfinance organizations reached 1.5 trillion rubles, which is 217% more than in 2021 ($18.4 billion), and this year, an additional 60% growth is expected. The reason for this is that bank loans have become inaccessible due to the high key interest rate.
Due to the rapid decline in the standard of living, the population is forced to take out loans at an interest rate of 292% per year. One of the beneficiaries of this situation is the company CarMoney, which is linked to the former wife of russian dictator vladimir putin, Lyudmila Ocheretnaya. Her profit from microloans has increased from $2.6 million in 2021 to $6.9 million in 2023.
For many russians, the inability to repay debts has become a reason to sign a contract with the russian ministry of defense. In 2023, the state duma passed a law allowing the cancellation of debts for mobilized individuals and their families. Debt bondage has turned into a mobilization tool, and the authorities and their circle directly benefit from it.
