Russian Lawmakers Reintroduce State-Supported Microfinance Loans for Regional Housing Initiatives

On Tuesday, Russia’s State Duma, the lower chamber of Parliament, approved a bill that permits state-owned microfinance institutions to provide mortgage loans through regional housing initiatives, overturning a recent prohibition that had faced criticism from local officials.

In May 2024, lawmakers had excluded over 30 microfinance institutions from a list of 47 licensed mortgage lenders, aiming to curtail lending that fell outside the supervision of the Central Bank. However, local authorities cautioned that this action would restrict access to favorable mortgage options for borrowers with lower incomes.

According to the new legislation, each region is allowed to appoint one state-affiliated microfinance organization to issue mortgages, all under the stringent oversight of the Central Bank. The regulator will establish extra requirements and keep an updated roster of authorized lenders available on its website.

The bill, which was proposed by a group of senators in July 2024, successfully passed its second and third readings on Tuesday and is now set to be reviewed by the upper house, the Federation Council, for further approval.

If signed into law by President Vladimir Putin, these new provisions will come into force 90 days later.