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Limitation of Interest Accrual ​

Federal Law No. 151 dated July 2, 2010 provides for restrictions on interest accrual by microfinance companies (MFC) and microcredit companies (MCC) on consumer microloans. These restrictions are regularly tightened according to the latest legislative changes.

Main Restrictions ​

Each MFC and MCC is required to display information about these restrictions on the first page of a short-term consumer loan agreement before the table with individual contract terms.

1. Threefold Limitation on Interest Accrual ​

As of January 1, 2017, a threefold limitation on interest accrual came into effect for consumer microloan agreements concluded from that date onwards. If the repayment period under the agreement does not exceed one year, MFC and MCC are not entitled to charge the borrower – an individual – interest after the amount reaches three times the loan amount.

Example: For a loan of 5,000 rubles, the borrower's debt at any point in time cannot exceed 20,000 rubles. This amount includes:

  • loan amount: 5,000 rubles,
  • accrued interest: 15,000 rubles (5,000 rubles × 3).

Important: The established interest rate limitation does not apply to penalties (fines, late fees), as well as payments for services provided to the borrower for a separate fee.

2. Termination of Interest Accrual in Case of Overdue Payment ​

The second restriction applies to overdue repayment of a short-term (up to one year) consumer microloan:

  • After the overdue payment occurs, MFC and MCC may charge the debtor interest only on the remaining (unpaid) portion of the principal debt.
  • Accrual will stop once the interest reaches twice the amount of this sum.

Example: If the unpaid portion of an overdue agreement is 5,000 rubles, the amount charged to the borrower will be 15,000 rubles, which includes:

  • overdue debt amount: 5,000 rubles,
  • accrued interest: 10,000 rubles (5,000 rubles × 2).

Important: Penalties (fines, late fees) should only be charged on the unpaid portion of the principal debt by the borrower.

Implementation in Brainysoft Software ​

In Brainysoft software, there is a system reference book called "History of Interest Calculation Restrictions". It displays data on interest accrual limitations in the Brainysoft program. This reference book is closed for editing.

Conclusion ​

Current restrictions on interest accrual, fees, and penalties are an important element of MFO legislative compliance. The Brainysoft system automatically takes these restrictions into account, which helps avoid violations and ensures compliance with Bank of Russia requirements.