Ukraine’s central bank proposes capping consumer loan rates
The National Bank of Ukraine (NBU) has developed a proposal to limit
marginal interest rates for consumer loans, which would require amending existing
regulations on consumer lending, the regulator said in a message on its website
on May 1.
NBU notes that setting marginal interest rates for microloans is a well-established practice in the UK, EU, and United States.
The maximum amount of the real daily interest rate – the total daily cost of a consumer loan, expressed as a percentage of the total loan amount – should not exceed 0.8% per day. According to the NBU, today this rate for microloans averages out at 2.5%.
The regulator also offers to reduce the excessive debt burden on Ukrainian consumers. To this end, it suggests authorizing the NBU to set minimum requirements for the borrower’s creditworthiness verification process.
“Today, individual financial companies don’t have similar requirements, and the assessment of the borrower’s creditworthiness is basically immitted,” the NBU said.
“At the same time, the creditor himself consciously chooses a business model, according to which a conscientious borrower pays exorbitant interest not only for himself, but also for those who cannot fulfill their obligations.”
The proposal envisages a series of additional fines for violating these potential new regulations.
The military war may be swinging in our favor, but the information war continues.
Just as an army needs soldiers, so does a free society need its journalists to ensure that people have access to honest, trustworthy voices to understand the world around them.
For the past five years, The New Voice of Ukraine has been working tirelessly to push back against Russian narratives and defend democracy. But we cannot do it alone.
Please consider supporting us on Patreon for just $5 a month – your donation does directly to supporting journalists and ensuring that this front of the infowar says solid and defended.
Thank you.
Follow us on Twitter, Facebook and Google News
