MOSCOW, Aug 18 (AFP): New machines popping up in Russian shopping centres seem innocuous enough - users insert their passport and receive a small loan in a matter of minutes.
But the devices, which dispense credit in Saint Petersburg malls at a sky-high annual rate of 365 per cent, are another sign of a credit boom that has authorities worried.
Russians, who have seen their purchasing power decline in recent years, are borrowing more and more to buy goods or simply to make ends meet.
The level of loans has grown so much in the last 18 months that the economy minister warned it could contribute to another recession.
But it's a sensitive topic. Limiting credit would deprive households of financing that is sometimes vital, and could hobble already stagnant growth.
The Russian economy was badly hit in 2014 by falling oil prices and Western sanctions over Moscow's role in Ukraine, and it has yet to fully recover.
"Tightening lending conditions could immediately damage growth," Natalia Orlova, chief economist at Alfa Bank, told AFP.
"Continuing retail loan growth is currently the main supporting factor," she noted.
But "the situation could blow up in 2021," Economy Minister Maxim Oreshkin warned in a recent interview with the Ekho Moskvy radio station.
He said measures were being prepared to help indebted Russians.
According to Oreshkin, consumer credit's share of household debt increased by 25 per cent last year and now represents 1.8 trillion rubles, around $27.5 billion.
For a third of indebted households, he said, credit reimbursement eats up 60 per cent of their monthly income, pushing many to take out new loans to repay old ones.
