On full program: Putin instructed to fine-tune preferential lending
Preferential loan programs in Russia should be fine-tuned to take into account the fight against inflation and tight budget policy. This was stated by Vladimir Putin on December 23 at a meeting on economic issues. It is important to monitor the effectiveness of lending support and the achievement of targets against the background of the key rate. However, the programs are showing positive results - mortgage benefits have allowed to achieve record figures of housing construction. According to experts, the main vulnerability of all preferential programs is their dependence on the movement of money market indicators, and sometimes they lead to distortions: for example, while the mass mortgage with state support was working in Russia, real estate prices were growing much faster than average inflation. What preferential programs are available today and what instructions Vladimir Putin issued - in the material "Izvestia".
Preferential lending to citizens
December 23, Vladimir Putin held a video conference on economic issues. In the center of attention - the transition to balanced economic growth with low unemployment and moderate inflation. The President has touched on this topic several times: both at the VTB forum "Russia Calling!" and at a meeting of the Strategic Development Council.
- It is obvious that lending to the real sector, industry, agriculture and services, is an important factor of strong economic dynamics, increased investment in the expansion of production facilities and the creation of new jobs," the President said.
Today, the government is implementing a number of programs to support lending to both businesses and citizens, the President reminded. They mainly provide for subsidizing interest rates: such soft loans already occupy a significant share of the bank portfolio and reach about 16% of it, or more than 17 trillion rubles, said Vladimir Putin. Now in Russia there are several programs of preferential lending. Citizens have access to family mortgages at 6%, as well as Far Eastern, Arctic (at 2%) and for IT-specialists (at 5%). According to the head of state, more than 10 trillion accounts for preferential housing programs.
- The result of such support is noticeable. If we take mortgage subsidies, then with the help of this instrument hundreds of thousands of families have improved their housing conditions, and our construction complex has reached record volumes of housing commissioning. With access to soft loans, agricultural output is increasing, the number of people employed in the segment of small businesses is growing," said the head of state.
Vladimir Putin again instructed the Cabinet of Ministers to engage in informational work with the population on such programs: to tell about their volume, terms and conditions of receipt. "So that there are no situations when we announce programs, they are in demand, they seem to be gaining momentum, and it turns out that the financial limits for them have been exhausted. Please do not allow such things," he emphasized.
Obviously, the President again referred to the incident with the issuance of family mortgages. Recall that at the end of October, "Sber" and VTB suspended the record for transactions on it because of the exhaustion of limits. In both credit institutions explained that as soon as the Cabinet of Ministers will allocate new limits, the banks will promptly resume work on this program. Putin in early December even resented the fact that Russians were not warned in advance about the availability of limits. And then he promised that there would be no limits at all.
- We are acting in objective conditions of restraint, the need to contain inflation, we are implementing tough approaches in the budget policy and we must build credit policy accordingly. In this regard, it is necessary to fine-tune the preferential credit programs, to further focus them on ensuring the technological sovereignty of the country and the development of the supply economy. Among other things, it is necessary to analyze the fairness of distribution of risks of key rate growth between banks, borrowers and the federal budget," said Vladimir Putin.
He noted that in the conditions of high key rate it is necessary to track the effectiveness of preferential lending and conduct comprehensive monitoring of target indicators. The main vulnerability of all preferential programs is their dependence on the movement of money market indicators, explained independent expert Andrei Barkhota. According to him, the higher the interest rates, the higher the demand for preferential financing. In addition, with high key interest rates, budget expenditures on interest compensation increase significantly, and the limits quickly run out. Also, preferential lending often leads to distortions in the market, added Igor Dodonov, analyst of FG Finam. For example, while in Russia worked mass mortgage with state support for new buildings, real estate prices rose much faster than average inflation.
Preferential lending for business
There are also several programs for business. The most popular - "1764" - is designed for any small and medium-sized companies: the rate is calculated according to the formula "key + 2.75%". There are also separate offers for farmers, for IT-companies and for industrial enterprises. These programs operate on a point-by-point basis and work quite effectively, as indicated by the exhaustion of the subsidy limit under them - it comes much earlier than the established period, says Freedom Finance Global analyst Vladimir Chernov.
However, along with control over the targeting of lending, the president noted that it is important to link the receipt of favorable loans with the companies' IPOs, "where it is reasonable and expedient, that is, in relation to large companies, leaders of their industries". Vladimir Putin has repeatedly spoken about the development of the stock market in Russia before: in particular, he set the task of doubling its capitalization by 2030. In addition, as the Ministry of Finance stated, 30 companies with state participation will be able to place their shares on the stock exchange for up to 1 trillion rubles until then.
- Preferential lending on condition of IPO will encourage companies to initial public offering of their shares on the stock exchange. The state is likely to provide companies with preferential investment loans or subsidies, as well as allocate funds for specific projects on condition that the company goes public," suggested Vladimir Chernov.
There is another option - all companies should be divided into two categories: those with the potential for debt financing (loans) and those with the potential for equity financing (placement of shares on the stock exchange), believes Andrei Barkhota. For the first category it is possible to offer targeted preferential loans, which will be in essence associated with project financing at a cost 5-7 p.p. below the market rate.
Enterprises of the second category will realize IPO. In this case, the process itself will not exceed 6-8 weeks, and the state will co-finance the costs of testing investor demand and marketing, the expert added.
- It is important to take into account the investment programs of state corporations, their role in balancing the entire market of corporate lending. On this basis, it is necessary to apply a competent, responsible, I would say, balanced approach to managing the loan portfolio of companies with state participation. I expect to hear proposals in this regard today," the President addressed the Cabinet of Ministers.
Igor Dodonov from Finam emphasized that some large companies in the structure of the Russian economy are actually backbone companies for entire industries. If they run into financial difficulties, it may have a big negative impact on the economy as a whole and lead to large and unplanned budget expenditures, as such companies will need to be "rescued". Therefore, it is important to control their debt load, the expert summarized.
According to Vladimir Putin, the debt load of companies with state participation has recently increased. The President reminded that the authorities have addressed this topic many times: "companies with state participation play a special role. Here it is important not to be too rigid with the requirements to the investment programs that they formulate for themselves.
At the same time, they should be allowed to implement programs that the state cannot do without and support projects that have become the driving force for entire sectors of the Russian economy. In November, the Central Bank has already made a number of proposals to limit lending to state-owned companies. In particular, the regulator plans to make loans to large borrowers more expensive and unprofitable for banks. Borrowers whose consolidated debt exceeds 2% of the banking sector's capital will be considered large. As Central Bank head Elvira Nabiullina said on December 20, there are no risks in this sector so far, but they may appear - and the Bank of Russia is acting proactively.
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