Borrower behavior of the population: modern aspects (case study of the Vologda oblast)

The article studies the specifics of people’s borrower behavior that in recent years has become more and more important in financial practice of Russian citizens. The article reveals the relevance of studying this issue for both national and regional economy. It notes that aggressive policies of financial institutions promoting credit products, the insufficient level of financial literacy of the Russians, and the fact that they often inadequately evaluate their own financial opportunities create certain threats. In this connection, the author substantiates the necessity of evaluation and systematic monitoring of the situation in the retail lending market. The main conclusions of the article are based on macrostatistical data and on the results of a pilot sociological research into borrower practices of the Vologda Oblast residents conducted by ISEDT RAS in 2013. As a result, not only a quantitative assessment was obtained, but also certain substantive features and socio-demographic parameters of borrower behavior of the region’s population were defined. The article shows that the current situation in the lending market in Russia as a whole and in the Vologda Oblast is characterized by the increase in the amount of loans issued to individuals, the growth in the amount of overdue debt and the number of borrowers who resorted to relending. The author identified and analyzed key factors that influence the formation of borrower behavior in people, in particular, financial status, level of income and consumer preferences of citizens. The article highlights the main motives of borrower behavior, criteria for choosing financial institutions and reasons for people’s reluctance to take loans. The results of the analysis presented in the article indicate that borrower activity among the region’s population is moderate. The oblast residents are mostly rational with regard to loan issues. The majority of borrowers prefer consumer loans or car loans, without burdening themselves with large sums of borrowed funds, and, when choosing a loan, they pay attention to lending terms (i.e. interest rate and favorable conditions of the loan). The article concludes that it is necessary to prevent possible negative changes in the retail lending market, as well as in the borrower behavior of the region’s population. For this purpose it is proposed to implement the following key measures: to enhance people’s financial literacy, to protect borrowers’ rights effectively, and to raise the real incomes of citizens.