Solving the Problem of Credit Defaults in Retail Sector

Abstract

1. Introduction Under the conditions of general economic decline and reduction of consumer demand, credit responsibility of population reduced as well. This is caused primarily by aggravation of economic state in Russia--more and more Russians face loan delinquency. While up to this time the analysts have been able to state that the cause of this is low level of population literacy, nowadays economic factors and reasons come to the foreground. The problem of credit defaults in retail segment was studied by Russian and foreign scientists. Conceptual problems of credit defaults are presented in the works by Thalassinos, Liapis Thalassinos (2014), Thalassinos et al. (2013), Giovanni D'Alessio (2013), Dermine J., Netode Corvalho (2004), [PHI]pocT (2006) and others. Among the works by Russian authors, it is possible to distinguish A. Belousov (Belousov, 2014), V. Bobyl (Bobyl, 2014), E. Vaysbek (Vaysbek, 2014), O. Kuzina (Kuzina, 2013), E. Mozzhukhina (Mozzhukhina, 2013), and others. As the analysis showed, most researchers viewed determination of possible influence of sanctions on development of the spheres of national economies. At the same time, analysis of modern studies showed the necessity for further study of the viewed direction of banking retail and, especially, its applied sphere--which predetermined the direction of this research. 2. Analysis of dynamics of volume and annual rate of growth of retail credits delinquency Analysis of banking statistics data showed that the share of past-due debt in bank portfolio in retail segment exceeds the share of past-due debt for corporate profile: according to statistics of the Bank of Russia, it constituted 7.6%, as of the beginning of the second quarter of the current year, while in corporate segment--5.0%. The banking system has not seen such bad indicators recently (January 2013--March 2015) (Figure 1). Figure 1 shows that over 2010-2015, the share of delinquency on loans for individuals always exceeded the corresponding indicator for loans for companies. Only in the period of April 2012--September 2013, the share of individual loans delinquency was at the level of non-financial companies (legal entities) loan delinquency. As certain authors state, in some market segments the situation is nothing but critical. Thus, the highest delinquency is observed with consumer credits--15.2%, then go POS credits (14.9%), and secured credits (14.4%). According to one of the largest collecting agencies "Sequoia credit consolidation", the volume of past-due debt for auto loans constituted 47.6% in 2014, which exceeds the similar indicator of the previous year by 30%. It should be noted that the share of unsecured retail credits of the portfolio of homogeneous loans does not reduce, staying at the level of 54-56% (Figure 2). Many experts pay attention that Russians have failed to return credits in time. The share of credits to individuals, for which one or several payments are past due by more than 90 days grew by 2 times from January 1, 2014 to October 1, 2015, constituting 8.0%. Delinquency grows, despite the fact that banks actively clean their portfolios. Banks write hopeless debts off, and transfer other debts to collector agencies. According to analysts of the National agency of collecting, banks offered for sale delinquent loans for RUB 137 billion in the first half of 2014, while in the previous year the offer had not exceeded RUB 115 billion. At that, the prices for delinquent portfolios reduced by 20-25% in 2014 (Zhelobanov, 2014). The research showed that in mid-2012 the annual (as compared to the similar period of the previous year) growth rate achieved its peak values, exceeding the level of 40% (see Figure 3). At that, debt for unsecured consumer credits grew even faster annual growth rate in this sector constituted 60%. The analysis showed that a rather high indicator of penetration of consumer crediting in Russia exceeded this indicators in Europe by 2. …