Financial Services for Low-Income People in Russia: New Challenges of the Economic Boom

Publication Date: Apr 2008
Published by: Microfinance Regulation & Supervision Resource Center
Document Type: Paper (PDF)

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Does Russia need a separate law on microlending?

This paper argues that high growth rates and unequal distribution of wealth in Russia necessitates a new perspective on the role of microfinance in the country’s financial system. It also provides information from the current debate on the need for a special law on microlending in Russia.

The paper finds that while Russia has comprehensive laws that regulate financial institutions, the rapid growth and evolution of financial markets has created new challenges for regulators. The paper calls for the development of a new, more detailed framework for the classification of financial providers.

The paper also argues that although market growth and technology penetration are breaking through the conservative approaches of policymakers in Russia, appropriate regulatory responses will only become clearer in the future once the current banking sector boom subsides and the size and the profile of the unbanked population are better understood.