Russian Orthodox Patriarch Kirill is calling on the Russian Duma (parliament) to curb the growth of predatory micro-credit consumer loans. Speaking yesterday (26 January) to assembled participants at the 5th annual Christmas parliamentary meetings, His Holiness observed that the unchecked onerous loan practices of many consumer loan operators have crippled low-income families and individuals across Russia.
Many micro-credit loan operators have targeted the elderly and young adults who are either underemployed or unemployed. Loan applications of some lenders require the listing of extended family members and if the loan recipient fails to repay, current law is often ignored and lenders seek repayment from others who were not signatories to the loan.
Noting that many of these loans are rapacious usury in its manifestation, the Patriarch called on the state Duma to address the practice of high interest rates that are often impossible to repay for those on small and fixed incomes. As some debtors have lost their homes in the process, the Patriarch described the current situation as robbery, and said that such operations must be stopped by force of law.
In 2010 the Duma passed Federal Law No. 151-FZ on Microfinance and Microfinance Institutions. While attempting to provide oversight, it also led to explosive growth of so-called “pay day” style loan operators along with legitimate small business micro loans.
Patriarch Kirill recounted his personal experience in India where micro-credit banks were helpful, offering small loans to individuals at low interest in order to start business, etc. He described such low interest micro-banks as supporting the poor.