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Financial Analytics: Science and Experience
 

The key principles of responsible lending and regulatory approaches applied in developed countries and Russia

Vol. 8, Iss. 12, MARCH 2015

PDF  Article PDF Version

Available online: 31 March 2015

Subject Heading: Economic policy

JEL Classification: 

Pages: 38-47

Nikulina S.I. Research Financial Institution, Moscow, Russian Federation
SNikulina@nifi.ru

Urumov T.R. Research Financial Institution, Moscow, Russian Federation
TUrumov@nifi.ru

Rakov I.D. Research Financial Institution, Moscow, Russian Federation
rakov@nifi.ru

Importance In contrast to developed countries, the system of responsible lending in Russia is at its initial stage of development. Despite the enactment of Federal Law "On Consumer Credit (Loan)" of December 21, 2013 № 353-FZ, the consumers of financial services are underprotected in our country. In the conditions of difficult economic situation, the problem of implementing responsible lending principles in the Russian banking practice assumes particular relevance. The use of successful experience accumulated by developed countries may help establish a solid basis for the future system of socially responsible lending in Russia.
     Objectives The main purpose of the study is to determine the fundamental principles of responsible lending in developed countries and the most effective regulatory approaches. The objectives include considering the elements of responsible lending system and identifying the ways of consumer credit market regulation in developed countries. The paper provides an analysis of the situation in the Russian consumer lending market and appropriate regulatory mechanisms for this area regulation.
     Methods The analysis of practical experience and legal framework in the field of responsible lending in developed countries served as a methodological basis of the study. The focus of the analysis was on efficient implementation of statutorily prescribed legislative provisions.
     Results On the basis of the analysis, we have identified the main principles of responsible lending in developed countries and determined the most effective tools to regulate relationships between lenders and debtors. We have developed recommendations for possible use of responsible lending experience of developed countries in Russian environment. The recommendations may be useful for lawmaking activity to improve social responsibility of credit and financial institutions of the Russian Federation.
     Conclusions and Relevance We concluded about the need for implementing responsible lending principles of developed countries in the Russian banking practice. This measure will facilitate enhancing the quality of financial services, improve and strengthen the banking system in general.

Keywords: consumer credit, responsible lending, principles, regulatory approach, USA, Great Britain, Belgium, France

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