A financial regulation and supervision model in the implementation of responsible lending practices: mechanisms and tools
Importance Whereas the Russian Federation is very involved into the global community, the social priorities of responsible lending should be adopted in the national financial system as soon as possible. It is a matter of the nearest future for the Russian lending sector to adopt the relevant philosophy. In this respect, it becomes more relevant and important to evaluate whether the State is prepared to handle and steer the process. It is also crucial to select tools, which would be most appropriate for implementing, monitoring and controlling the responsible lending practices in the Russian economic environment. The article focuses on issues of financial regulation and oversight during the implementation of the responsible lending practices. Objectives The research aims at forming a model for regulating and overseeing the implementation of responsible lending practices in the Russian Federation. Methods The research relies upon such scientific methods as analysis, synthesis, deduction, comprehensive approach, comparison, consistency and other cognitive approaches. Results The results of the research may be helpful for governmental authorities, banking sector, as well as microfinance institutions in order to improve their lending policies, including the responsible lending principles in line with the advanced experience of foreign countries. Conclusions and Relevance The article states that it is necessary and reasonable to implement the responsible lending practices in the Russian Federation as a tool to combat predatory lending practices. The process decelerates since there are no methods to identify non-performing loans in the future, collect information about such loans, and especially generate unbiased and aggregate data on the extent of and trends for predatory lending.