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.