What changes in microcredit are expected from the new year?

What changes in microcredit are expected from the new year?

Recently, the Ministry of Justice announced the changes expected in the microcredit market from January 1 of the new year. Many citizens have faced loans with vague terms or conditions written in small print in recent years.


How will the amount of fines and penalties be limited? How will microloans change?


Microcredit was inadequately regulated in the past. Sometimes the fines amount for non-payment of debt could reach 1000%. Then some collectors demanded money by inhuman methods. People had problems becaise the microloans is not subject to non-disclosure requirements.


Such draconian measures will disappear thanks to the new legislation. Even if incredible fines and penalties are spelled out in the contract in small print, it will not have legal effect. The document signed by the client would be contrary to the current legislation.


Now, when the amount of credit does not exceed the minimum wage, it will be considered consumer loans and it will be regulated by the consumer lending law. This means that the sum of all fines and penalties on a loan that is less than the minimum wage cannot be more than two amounts received by the client for this loan.


What other important changes are expected from January 1:


✅ It is prohibited to change the interest rate on the loan. A bank cannot increase the amount of interest as a penalty for a loan delay.
✅ The lender submits data on all small consumer loans free of charge to a special credit bureau. They are included in the relevant Unified Register. It is important to provide information to one office, and not all at once.
✅ The consumer must provide access to his credit history before concluding an agreement. He needs to be allowed to store, process and distribute data by credit bureaus. If the consumer does not want to give consent, the lender has no right to conclude a loan agreement.
✅ The number of quick loans limiting. This protects both sides. Companies will not have large debit debts, and clients will not receive illegal loans to maintain debt service solvency.


The National Bank of Ukraine announced new requirements for credit companies. They must provide complete information about their loan products on their websites. This is necessary for the credit bureaus. They check banks for compliance with the terms of lending to current legislation.

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