The Russian parliament is preparing new laws in a bid to clamp down on predatory microlenders.
Under the new laws, companies offering payday loans will be forced to set a maximum interest rate of 150 percent per annum. The average interest rate for Russian microlenders is currently nearly 600 percent, Russia's Kommersant newspaper reported Wednesday.
Anatoly Aksakov, head of Russia's financial market parliamentary committee, confirmed that lawmakers were reviewing potential amendments to existing regulation, Kommersant reported. A spokesperson for Russia's Central Bank also said that experts were reviewing the plans, which could come into force by the end of 2017.
Officials began to prepare the regulations following a speech by Russian President Vladimir Putin in April, condemning dishonest lenders.
"There are some loan companies who knowingly mislead people," Putin said. "As a result, most borrowers almost inevitably fall into a spiral of debt."