Is business bad? Desire for a vacation? Whether it be desires or difficulties, the Petersburg entrepreneur Ioulia Galitch responds with a consumer loan, a product that is experiencing a boom in Russia due in particular to the erosion of purchasing power.
"When you start, you can no longer stop. And the worst part is that we are always in the position of debtor, even when we pay the bills on time," says this manager of 48 years who runs a makeup school and a store specializing in professional beauty products.
So, even though her company is struggling, she has just taken a loan of 80,000 rubles (around 1,140 euros) to pay for a vacation in Israel with her husband and 10-year-old son.
"I usually take credit cards (rather than cash loans). They're easier to get, but rates can go up to 49% a year, that's huge," says Galitch, who put his finger on the gears a few years ago and says he is "dependent".
This phenomenon is growing exponentially, with many Russians using these services to compensate for the decline in purchasing power, a consequence of the Western sanctions imposed on Russia in 2014 because of the Ukrainian conflict.
According to a study published in August by the public institute Vtsiom, 51% of Russians currently have outstanding loans, compared to 26% ten years ago.
- "Engine of growth" -
On the outskirts of metros, in the suburbs, nestled in shopping centers, micro-credit establishments, sometimes on the edge of legality, are flourishing, promising easy and fast money without any conditions. All at often astronomical rates, despite the tightening of the Central Bank.
The amount of unsecured consumer debt amounted to 8,700 billion rubles on October 1 (125 billion euros at the current rate), up 17.6% since January 1.
Economy Minister Maxime Orechkine sounded the alarm at the end of July, saying that "the situation could become explosive in 2021". But since then, radio silence from the ministry on the issue.
Analysts interviewed by AFP note that these kinds of financial products have become essential to support the Russian economy, whose GDP is expected to grow by just 1.3% in 2019.
"The ministry no longer wants to draw attention to this because it is one of the main drivers of growth at the moment," said Natalia Orlova, chief economist at Alfa Bank.
These loans are also often the only way for the Russian middle class to access the smartphones and beaches they dream of. But for those who do not settle their debts on time, an aggressive business of collection has been created.
Enrolling in the register of persons prohibited from leaving Russian territory is a particularly dreaded measure. According to the National Association of Collection Agencies (Napca), about 10 million Russians - a quarter of debtors - would have trouble paying their debts.
- "Not killed" -
Victor Semendouïev, vice-president of the collection company Credit Express, considers that the sector has been largely purged of its excesses since legislation adopted in 2016.
"This law specifies how many times a week we can call, send SMS, letters," he says, while behind him, twenty employees make phone calls to debtors.
The businessman also ensures that night calls are banned, conversations recorded and that in case of abuse, a possible complaint.
Olga Skoudoutis, a 63-year-old retired veterinarian, describes another reality. For ten years, she has spent half of her 23,000 ruble (330 euros) pension every month on drafts.
According to her, a collection company, among other methods of intimidation, threatened relatives, demolished her mailbox and blocked her lock with glue.
And the police remain, she says, deaf to calls for help. "They answer me that there is no corpus delicti: + They did not kill you, come back when they have killed you +".
© 2019 AFP