Financial institutions offering microloans, known as microfinance, have made adjustments to their spending practices to conserve resources.
Russian Microfinance Companies Maintain Profitability Amidst Rising Interest Costs
In the first half of 2025, Russian microfinance companies (MFCs) have managed to maintain their profits, despite a significant increase in interest expenses. According to reports, interest expenses for MFIs rose by 161% to 11.8 billion rubles, due in part to the high key interest rate that climbed from 16% last summer to a peak of 21%.
However, MFCs have focused on cost optimization to offset this increase. One of the primary strategies has been the accelerated write-off of bad loans, a move aimed at reducing the burden of non-performing assets and improving financial stability. As a result, the share of loans issued online has increased to 88%, and more than half of all MFIs have implemented staff cuts in response to current economic conditions.
Some MFIs, such as Summit Group ("DobroZaym"), have transitioned to online operations and frozen non-critical projects to reduce the number of junior specialists. This shift towards digital operations has allowed these companies to streamline their operations and reduce costs.
Potential fintech-driven business process optimizations, such as automation and digital lending platforms, could also enhance operational efficiency and lower costs. While there is no specific mention of Russian MFCs adopting these fintech optimizations, the trend in the region’s financial sector suggests such measures contribute to cost containment.
Staff expenses decreased by 13.7% to 2.9 billion rubles in the first half of 2025, as reported by 16 MFIs. Advertising expenses also saw a slight decrease, falling by 0.5% to 4.5 billion rubles.
The Central Bank's decision to reduce the key rate to 18% has led to expectations of a decrease or slower growth in MFCs' interest expenses in the second half of 2025. Ivan Uklein, senior director of bank ratings at "Expert RA", notes that microfinance companies have a more substantial capital adequacy buffer compared to banks. This buffer provides a safety net for MFCs, allowing them to weather economic fluctuations more effectively.
Leonid Kornilov concludes that the industry expects a decrease in interest expenses and slower growth in the second half of 2025. According to Webbankir, a larger profit volume is expected in the second half of 2025 compared to the first. This optimistic outlook is due to the expected decrease in interest expenses, combined with the potential benefits of fintech-driven business process optimizations.
In conclusion, Russian microfinance companies have demonstrated resilience in the face of increased interest costs in 2025. By focusing on cost optimization, particularly through the accelerated write-off of bad loans and potential fintech solutions, MFCs have been able to maintain their profits and ensure their financial stability.
Personal-finance management has been crucial for Russian microfinance companies (MFCs) in mitigating the effects of rising interest costs. By implementing cost-saving measures such as increased online lending, staff cuts, and the Write-off of bad loans, MFCs have managed to reduce expenses and maintain profitability.
With the expectation of a decrease in interest expenses and a larger profit volume in the second half of 2025, Russian MFCs are also exploring fintech-driven business process optimizations like automation and digital lending platforms to further improve operational efficiency and lower costs in personal-finance investing and business operations.
