Russian Legislation Would Permit New MicroFinance

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MOSCOW – Russian President Dmitry Medvedev has signed a bill into law that seeks to create a legal framework for microfinance institutions, including credit unions.

The law comprises government regulation of the microfinance industry and terms of microloans, according to the TASS news agency. Under the new bill, if enacted credit unions – and banks, pawnbrokers, savings and loan associations, and other entities – will be able to provide microloans. Microfinance institutions will not be allowed to do microloan business with a borrower if, as a result, the borrower's microloan debt to the institution would exceed one million rubles, or $34,770.

Getting effective enabling legislation into place has long been the primary challenge for credit union leaders in Russia as they seek to resurrect CUs in the country.

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