MOSCOW, November 6 (RAPSI) – A bill envisaging to declare void a federal law on microfinance organizations has been submitted to the State Duma, the lower house of Russia’s parliament.

In spite of the fact that micro crediting is a part of the global practices, currently it seems unfeasible to develop this financial market instrument in Russia as the operations of such organizations result in catastrophically fast accumulation of the population’s debts and a rapid decline in the living standards notwithstanding earlier legislative restrictions, an explanatory note to the document reads.

Authors of the draft law believe that the repeal of the law will put an end to loan sharking on the part of credit organizations, protect low-income groups from seductive advertising disseminated by microfinance organizations, and indirectly facilitate a drop in crime.

A new adjusted to the global practices law on microfinancing can be adopted when the economic situation in the country improves, the authors of the initiative observe.