Since the beginning of 2024, Ukrainians have begun to actively increase their debts on microloans, also known as “payday loans.” The total amount of debt has increased 1.7 times, reaching 16.02 billion hryvnias. Every month, Ukrainians take out about 670 thousand such loans.
The average loan amount increased by 28% compared to last year, reaching UAH 6,190. This indicates a growing demand for microloans, although high interest rates remain a major problem for borrowers.
Most often, Ukrainians take out loans for a period of 93 days to 1 year, which is 66.6% of all loans. However, there are also those who take out loans for a period of up to 31 days (14.6%) or for a longer period (32-92 days – 9.6%).
Companies are actively offering promotional terms for new clients, trying to attract them to use microloans. For example, one of the companies promises to take only UAH 45 per month for a loan of UAH 15,000. But the real terms of the loan often include incredibly high annual interest rates, which can reach 105,015% per year.
The main risk is that if the loan is not repaid on time, the client may find themselves in a debt trap due to extremely high interest rates. As rates increase exponentially with outstanding debts, borrowers face enormous financial problems.
