P2P Lending in Russia

June 7th, 2020
3 minutes read

The Russian Market for Crowdfunding

According to data from the latest report published in 2020 by the Cambridge Centre for Alternative Finance on the global market of alternative finance and crowdfunding, Russia had a total funding volume of €105.6 million in 2018, up from €28.4 million in 2017, which corresponds to an impressive growth rate of 271.3%. This places Russia’s crowdfunding market as number 16 in Europe and as number 33 in the worldwide crowdfunding statistics. The countries topping the list in Europe are the UK, the Netherlands, Germany, France, and Italy. However, no domestic/locally operating firms took part in this investigation that included 11 foreign-based platforms operating in Russia. Also, note that these numbers also include a few other alternative finance business models besides crowdfunding models like P2P lending and equity crowdfunding.

In addition to Cambridge Centre for Alternative Finance, the Bank of Russia monitors the Russian crowdfunding market quarterly by reviewing reports voluntarily submitted by key crowdfunding platforms. Here, the Bank of Russia Annual Report for 2018 (updated 18.05.2020) (see page 162) shows that the crowdfunding market in Russia amounted to ₽15.2 billion (€196.3 million) in 2018. With ₽14.9 billion, the majority was associated with the financing of SMEs. However, unpublished numbers from the Bank of Russia suggest a sharp decline in crowdfunding volumes in 2019.

Best Peer-to-Peer Lending Platforms in Russia

Here, you will find a list of the best peer-to-peer lending platforms in Russia. When choosing the best peer-to-peer lending sites in a country we consider a variety of factors that you can find in the Methodology below.

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Taxation on Peer-to-Peer Loans in Russia

Investments in P2P loans are taxed according to Article 208 and Article 224 of Russia’s tax code, which means investors must pay a tax of 13% on the total amount of income earned. More details can be found by visiting the Federal Tax Service of Russia.

Keep in mind that this should not be considered tax advice and can be outdated, why you should always contact a tax adviser when handling your taxes.

Regulation on Peer-to-Peer Lending in Russia

A new law regulating crowdfunding and P2P Lending in Russia entered into force on January 1, 2020, with the requirement that already existing platforms must be compliant with the law by July 1, 2020.

The crowdfunding regulation law introduces several requirements for crowdfunding platforms, such as:

  • A minimum capital requirement of ₽5.000.000 in own funds.
  • Being a Russian legal entity
  • Different requirements to the management team operating the platform

Also, individual investors are limited to investing ₽600.000 per calendar year unless they are registered as qualified investors, individual entrepreneurs. The limit does not apply to legal entities, but there is a limit of ₽1.000.000 on capital investments on a platform per calendar year if the investment is not about acquiring digital rights from a public joint-stock company.

The law regulated both loans, equity securities, and the purchase of utility digital rights.

To learn more about regulation on crowdfunding and peer-to-peer lending in Russia, please visit the relevant federal law here.  

Methodology

At P2PMarketData we are dedicated to providing an unbiased overview of the Peer-to-Peer Lending market and platforms. Among other, in our mission to bring more transparency to the market for online lending we track over 70 platforms funding volumes.

When choosing the best platforms in a country we have considered a variety of factors such as:

  • Number of investors
  • Minimum investment requirement
  • Historical annual returns
  • Diversification opportunities
  • Reinvestment opportunities
  • Educational and informational offerings
  • Platform fees
  • Total capital invested
  • Features (such as secondary market and automatic investing)
  • General transparency (the difficulty of finding who the owners are, how they make money on the platform (fees), terms & conditions and more)
  • Management team

We also look into the company’s online reputation (for example customer reviews, news, complaints, average monthly searches and social media).