The main drawback of microloans is their steep interest rates, which can make repayment challenging for many borrowers. This has been highlighted by a banking market expert, Andrey Barkhota, in discussions about consumer credit. He notes that when people take on microloans and delay repayment, the total amount owed grows rapidly, especially for those with limited income. This can trap borrowers in a cycle where new microloans are used to cover older ones, causing debt to snowball beyond control. Barkhota emphasizes that this pattern pushes many citizens into a financial squeeze, where the perpetual rise in debt becomes difficult to reverse without a longer, stable repayment plan. — according to Moscow 24, the expert’s warning resonates with concerns observed in lending markets and reflects a broader risk profile associated with small, quickly approved loans.
For individuals seeking a small line of credit, Barkhota advises considering a bank-issued credit card with a modest limit. He suggests that such a card may come with a grace period during which interest does not accrue, providing a window to manage purchases without immediate interest costs. If a bank refuses to issue a credit card, the expert notes that a microloan could still be an option, but with the obligation to repay swiftly to avoid piling up debt. The point is to weigh the convenience of quick access to funds against the potential for costly, compounding interest. — the reasoning aligns with practical guidance offered by financial professionals who advocate cautious use of short-term credit.
In conversations with online lending platforms, the press service of a prominent alternative lending service described patterns in how Russians use microloans. They observed that many applicants request microloans in the days leading up to payday, creating a typical loan window of roughly 22 to 29 days. These short-term borrowings accounted for a significant share of recent credit activity, reflecting that consumers often turn to microfinance to bridge gaps between pay cycles. The data suggests that during these brief periods, borrowers seek rapid access to funds to cover essential expenses or urgent needs. — industry sources have repeatedly noted this predictable payday dynamic as a driving factor behind microloan demand.
Experts have also discussed the outlook for microcredit volumes in the near term. Projections for the year ahead point to continued steady demand for small-value loans, particularly among segments seeking quick liquidity for everyday costs or unexpected expenditures. In this context, microfinance providers stress the importance of transparent terms and responsible lending practices to help borrowers avoid entanglement in unmanageable debt. The overarching message from analysts is clear: while microloans offer rapid access to funds, they should be used with awareness of total repayment costs and with a concrete plan to pay off balances promptly. — market commentary emphasizes prudent use and ongoing evaluation of lending terms as consumer needs evolve.