The number of microfinance organizations (MFIs) may decrease dramatically, as they will not be able to comply with the law on the introduction of biometric identification of clients when issuing funds.
From March 1, in Russia, in order to obtain a loan online from an MFI, citizens must confirm their identity using biometrics. The integration of such technologies will cost organizations approximately 30 million rubles.
As a result, small companies will close or be absorbed by large market players. This may affect 25% of MFIs.
Banks will be able to perform the functions of MFIs
Senator Vadim Dengin stated that some banks may take over the functions of MFIs. In particular, special departments will be opened for processing small loans.
He emphasized that the problems associated with microcredit organizations have still not been resolved. Collectors are buying up borrowers' debts, and "unclear structures" are appearing in the regions. Given this, the introduction of biometrics is a necessary measure, the senator emphasized.
This will protect citizens from fraudsters and unscrupulous companies that issue loans, turning a blind eye to dubious applications.
The senator expressed concern that the costs of launching biometrics would fall on MFI clients. Organizations may raise the interest rate to the maximum possible, he concluded.
