KYZYL, Russia – The story of Nadezhda Sat is familiar to people in southern Siberia’s Tyva region. Ten years ago, she took out a loan to buy a car.
“There are expenses in Tyva for which you just need to get a loan,” she told RFE / RL’s Russian service. “Like a car. Public transport is very bad – we don’t have commuter trains, trams or trolleybuses. Even normal buses run sporadically. And just saving money and buying a car isn’t realistic, especially since more and more expensive cars. “
The reason Sat – who lives in the regional capital, Kyzyl, a town of about 110,000 people about 3,600 kilometers east of Moscow – needed a car because her son’s kindergarten was 10 kilometers from his home.
“We also have big problems with kindergartens,” she explained. “When we could finally find a place, we had to take it. And there is no public transport there, so I had to borrow to buy a car. I had a second-hand, foreign brand, and paid for five years. “
Then her daughter finished her studies and Sat knew that there was no possibility for her higher education in Tyva. She took out another loan to send her daughter to an institute in another region.
“So for 10 years I paid loans for a car and to send my daughter to an institute,” Sat said, adding that she and her husband have paid around 40% of their combined monthly income to cope. to payments.
As for the last number, Sat may have been lucky. A recent study by the pro-Kremlin All-Russian Popular Front (ONF) found that Tyva is the most indebted region in Russia, with residents paying an average of 78% of their income to cover their debts.
“The debt level at Tyva, if it is 78%, is really fantastic,” said Valery Mironov, professor of economics at the Moscow Graduate School of Social and Economic Sciences, adding that the same study has found the national average debt to be an already worrying 35 percent. “And this shocking figure came from a pretty serious study. A debt of 40 percent is bad enough, and here they found 78 percent. This basically means that for every 10,000 rubles ($ 133) of salary that ‘they get, they pay 8,000 ($ 107)) on their debts. “
A third of the population below the “minimum survival”
Elmana Mekhtiyeva, president of the National Association of Professional Debt Collectors, told RFE / RL that the situation in Tyva is particularly worrying because wages there are very low.
“Tyva has really always been one of the regions with particularly high debt ratios,” she said. “So the situation is not new, but it certainly deserves some attention.”
The ONF study was based on figures from the Central Bank, the government statistics agency Rosstat and major banks.
In addition, according to the Ministry of Labor in August, Tyva has the highest poverty rate in the country, with 34.1 percent of the population living below the official “survival minimum”. The national average, according to a Rosstat report in April, was 12.1 percent.
The average salary in Tyva is around 37,000 rubles ($ 495) per month and the official unemployment rate is almost 12%.
“For the most part, people just survive,” local resident Ayana Khruma told RFE / RL. “If they want to improve their standard of living, if only a little – buy a new refrigerator or a washing machine – they need a loan… It takes a decent amount of money to prepare the children for it. school year or to buy winter clothes. It’s very difficult. They don’t borrow to buy a new Toyota or an Audi… People borrow for almost everything because they just don’t have the money.
She added that residents of small towns and villages are often reduced to obtaining loans to buy food, especially when wages and social payments are delayed. “The situation is very difficult,” Khruma said.
The microcredit industry in the region is booming, with the corresponding high interest rates.
“Microloans are advertised very aggressively,” said another local woman, Ayana Mongush. “They promise 1% loans, but not everyone understands they mean 1% a day. But people are just tired of not being able to buy anything, tired of living from paycheck to paycheck. So they take the loans without thinking what will come next. “
Kyzyl resident Chechek Saryglar climbed the debt conveyor belt in 2008. For years, she paid half of her monthly salary of 20,000 rubles ($ 270) to the bank. Some months she could not make the payments and resorted to microloans. When she missed the payment, interest rates skyrocketed and debt collectors began to harass her.
“They were calling day and night,” she recalls. “‘We know where you live. We know your family. Go sell a kidney.'”
“I started drinking,” she admitted, adding that suicidal thoughts had also crossed her mind.
Now she lives with her second husband and has quit drinking. Earlier this year, she finished paying off her bank loan, but she still deals with micro-lenders.
“I have borrowed 50,000 and have to repay 100,000 rubles,” she said. “But it’s easier now. We have a total monthly income of 40,000 rubles – our wages, plus what I can earn from sewing and crafts. And my older children have moved and are supporting themselves. . I still have debt and collectors are still calling about them, but that doesn’t bother me as much. “
Mironov said that many people in Tyva, like Nadezhda Sat, are falling into debt due to the poor infrastructure and social services in the area. In 2020, the region contributed 7 billion rubles ($ 93 million) to its budget and received an additional 18 billion ($ 240 million) from Moscow. The region does not have a railroad, which raises the prices of all goods and makes businesses reluctant to open up.
“What can the government do to support such a region? he said. “The government can at the very least ensure that basic social services are provided at a normal level, that is, at a level that allows people to use them without further difficulties. I’m talking mainly about health care and education.
Meanwhile, the region’s debt problems worsen.
“The main thing is to make your payments and not to ruin your credit,” Khuruma said. “And then you can buy something to eat.”