Paper

Greater Access to Retail Finance: Measures to Promote Microfinance in the Russian Federation, 2008-2012

Designing strategies to promote an inclusive financial system

This concept note evaluates current access to retail finance, especially microfinance, in the Russian Federation. It identifies client groups lacking access, and proposes an inclusive financial system to improve accessibility to finance.

As of 2008, around half of Russia's economically active population lacked access to financial services. The paper identifies two main types of financial exclusion, namely, territorial exclusion and technological exclusion. The most excluded groups in Russia are low-income people, rural population, small businesses and entrepreneurs. The paper states that the challenge of making retail finance accessible lies with credit institutions, cooperative institutions and non-profit and commercial MFIs. The concept note identifies the following focus areas for creating an inclusive financial system:

  • Reducing cost of expanding and diversifying bank branch networks;
  • Promoting non-bank MFIs;
  • Enabling large non-bank MFIs to transform into regulated credit institutions;
  • Enabling financial literacy.

The concept note recommends that building a multi-tiered system of credit cooperatives, establishing support infrastructure for microfinance and implementing comprehensive regulations for branchless banking should be among government policy priorities.

About this Publication

By The National Partnership of Microfinance Market Stakeholders (NAMMS), The Russian Microfinance Center (RMC) & The Association of Russian Banks (ARB)
Published