Russia Microfinance Trend Report 2008-2009

This report summarizes performance data from Russian MFIs for 2008. It also presents findings from the 2009 crisis monitoring effort.

2008 was a challenging year for Russian microfinance due to the global financial crisis and slowdown of the country’s economic growth. The report states that:

• 2008 witnessed massive outflow of savings due to public withdrawal, dwindling external commercial bank funding and delinquencies;
• Global crisis affected Russia in the last quarter of 2008;
• Crisis impact was highest during 2009, with reduction in loan portfolio and higher portfolio-at-risk;
• Microfinance market began to stabilize in the second quarter of 2009, with increased savings in credit cooperatives;
• MFI loan portfolio decreased in 2009 due to decrease in demand for loans caused by decreased business activity in response to lower consumer demand;
• Federal Law on Credit Cooperatives established conditions for self-regulated and transparent system of credit cooperatives in 2009.

The report predicts growth in MFI loan portfolio and outreach in 2010. It states that microfinance may drive post-crisis economic growth, particularly in smaller cities and rural areas.