The small and medium-sized business lending market is changing: commercial microfinance organizations increase their loan volumes, yet loan delinquencies rise at the same time. Kirill Chernovol, Researcher of the International Best Practices Analysis Department at the Gaidar Institute, talked about it.
According to the economist, the growing share of commercial microfinance organizations (MFOs) is driven by their active use of digital data to assess borrowers and their tendency to issue short-term loans for working capital, primarily to marketplace sellers. In H1 2026, commercial MFOs lent Rb61 bn to businesses, an increase of nearly one-third compared to the previous year. In contrast, state-owned MFOs issued Rb25.1 bn, a 3% decrease from the previous year figure.
At the same time, government organizations still account for the majority of the business microloan portfolio: 62% as of the end of June 2026. Their capacity is constrained by specific terms of support programs and volume of available funding.
"Credit accessibility cannot be assessed solely by interest rates. It is important to consider borrower requirements, rejection rates, and the ability to secure funds for the necessary term. Long-term loans are particularly important for businesses, whereas microfinance organizations more often offer shorter-term financing," noted Kirill Chernovol.
The expert also highlighted rising risks for borrowers. The average annual interest rate on loans provided to businesses by commercial microfinance organizations (MFOs) evidenced 41% in H1 2026. At the same time, the share of debt overdue by more than 90 days rose to 9.5%, with the volume of such debt increasing by 30% over the six-month period, even though the loan portfolio grew by only 2%.
"The problem is in the high debt burden on businesses. If sales slow down or customer payments are delayed, an expensive short-term loan must either be extended or repaid by a new debt. Therefore, it is crucial for an entrepreneur to assess not only the cost of the loan but also whether there will be sufficient revenue after all expenses to repay it," concluded Kirill Chernovol.