Putin is facing a growing economic crisis (Image: Getty)
Russian workers are increasingly turning to payday loans charging exorbitant , as they struggle to make ends meet in the growing economic crisis.
The Russian Central bank raised late last year to a record high of 21%, in an attempt to curb spiralling inflation.
The hike has significantly raised the cost of borrowing for both businesses and consumers alike.
Ordinary Russians are finding it almost impossible to get approval for consumer loans from their banks.
Food prices in Russia have gone through the roof (Image: Getty)
Shoppers have been hit particularly hard by the surge in prices for basic food items, which has seen the cost of a kilogram of potatoes shoot up by a whopping 90% over the last year.
Latest research shows that workers are increasingly applying for payday loans from so-called micro-finance organisations (MFOs).
The MFOs are charging eye-watering of 292% annually on the loans that they issue.
Data also shows that 70% of all new loans in December were issued by MFOs, compared to 47.4% a year earlier.
There has been a steep increase in MFO loans over the course of the last year in .
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The Russian Central Bank reported that from January to September 2024, MFOs issued loans worth RUB 1.26 trillion (approximately £10 billion), a 23.3% increase from the previous year.
Commenting on the trend, Kyrylo Shevchenko – the former head of ‘s National Bank – wrote on his X social media page: “Nothing says ‘economic stability’ like borrowing at 292% interest
“Microloans now make up 13.6% of total issued credit, a 3.5x jump from late 2023. A sign of growing financial strain in the #RussianEconomy.”
It comes as is struggling to find enough workers to fill vacancies in industries across the country.
In a report from May last year, the Central Bank noted “a significant shortage of highly qualified specialists and low-skilled workers alike” across .
And matters look like getting much worse for the Kremlin in the coming years, as the country’s demographic crisis looks set to worsen.
‘s Labour Ministry predicts that by 2030 the country will be short of 2.4 million workers.