The role of local authorities in the lending to individuals system: coordinating for the regional entrepreneurial community benefits

L.A. SHAFIROV
Candidate of Sociology (PhD), MBA (St. Gallen University), Executive DBA Student at the Financial University under the Government of the Russian Federation, Executive PhD Student at SKEMA Business School (Lille, France)

TERRA ECONOMICUS, 2013, Vol. 11 (no. 4.1),

p. 90-101

The paper focuses on the importance of changing the policy of the Central Bank of Russian Federation, which mainly aims at, by force of administrative measures, manipulating the quantitative parameters in individual lending, along with tighter requirements for certain groups of borrowers. Instead, the author argues, it appears more adequate to reorientate the purposes of the borrowers who today are, for the most part, are guided by the conspicuous consumption principle. Meanwhile, purpose of the loan is the important qualitative characteristic of the institutional environment in consumer lending. Rationalization of consumer lending, as the article confirms, could promote the local socio-economic development if synchronized with the interests of entrepreneurs of the region. Coordinating function of the local authorities in development of socially responsible consumer lending is discussed.

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Keywords: lending to individuals; socially responsible lending; institutional policy; development finance

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Publisher: Southern Federal University
Founder: Southern Federal University
ISSN: 2073-6606