Paul Goble
Staunton,
December 24 – Like other Russians seeking to maintain their standard of living
or at least prevent it from declining faster, pensioners in that country are
assuming debt; but they are doing so at such a rapid rate – experts now speak
of “a credit boom” among the elderly – that some worry they will not be able to
pay it back without taking out new loans.
That
puts some pensioners on the road to credit slavery in which they will be forced
to spend an ever larger portion of their small incomes which on average are less
than a third of the incomes of those of working age on debt service, something
that will be increasingly difficult as other costs rise.
During
the first ten months of 2018, for example, the United Credit Bureau of Russia
reported that pensioners in that country assumed 403.3 billion rubles (almost
six billion US dollars) in new debt, 42 percent more than they took on during
the same period a year (forum-msk.org/material/economic/15284513.html).
Banks are ready to give the
pensioners consumer loans because few of Russia’s elderly have mortgages,
because they have incomes that however small are unlikely to get smaller, and
because they are historically more ready to pay them back than some younger
groups. But whether they can handle such
a dramatic increase in debt remains to be seen.
Aleksey Volkov of the National
Bureau of Credit History says that bankers are betting they can because the
size of the loans given to pensioners is much smaller and because older borrowers
traditionally are more committed to paying back what they owe than are many
younger ones.
Caught in this trap, some of the elderly
may turn to their children for assistance; but many will simply cut back,
forced to pay back loans rather than spend money on basic needs like medicine
and food. To the extent that happens,
the economic crisis in Russia will hit them harder and sooner than almost any
other age group except perhaps the very young.
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