Banks may refuse a mortgage due to installment purchases from microfinance organizations

A bank may refuse to issue a new mortgage in Russia if the borrower made purchases in installments, which were issued by a microfinance organization, Natalya Gazetdinova, head of the mortgage lending department of the Granel Group of Companies, told RIA Novosti.

“Today, more and more borrowers are spoiling their credit history without even taking out large loans. We are talking about purchases in installments, which are processed online in a few clicks. Many do not think that behind such a transaction there is often a microloan from an MFO - or at least a request to such an organization, which banks see as an alarming signal,” the expert believes.

According to her, many online stores submit such applications automatically when applying for installment plans, and interaction with microfinance organizations is often perceived as a sign of financial instability.

About 30% of customers are turned down for a mortgage because of such purchases, loan brokers estimate.