MOSCOW, November 14 (RIA Novosti) - The volume of credit issued to households has risen more than tenfold in the past three years, and currently exceeds 1.5 trillion rubles ($55 billion), the Russian president said Tuesday.
But Vladimir Putin said Russia's banking system has so far been unable to meet the growing demand for retail loans.
"Foreign banks account for as much as 40% of the loans issued to the non-financial sector," he told a session of the State Council Presidium.
Retail borrowing remains expensive in Russia's fledgling banking sector, due to perceived high risk levels restricting investment and limiting banks' ability to provide credit at low rates. Russia continues to block foreign banks from opening branches in the country, in a drive to develop the sector, as well as limiting capital flight.
The president said more loans, including education loans, should be made available to Russians. "I am sure that a correct scheme can be found here, including with partial guarantees from the state."
The president said most Russians are afraid to use banking services, and that only 25% of the population hold bank accounts, while less than 10% use debit or credit cards.
Since the country's financial troubles in the 1990s, and due to a series of bank failures, distrust in banking institutions remains widespread, causing millions of people to hold their entire savings in cash.
"About 60 million people have been left outside the banking system," Putin said.
The president said investment projects in various sectors of the economy need long-term, cheap and large loans, which Russian banks are unable to provide. The creation of major financial and banking structures will help to strengthen the financial stability of the banking system, which is in the interests of both the business community and the state, he added.
