VTB mulls launching payday loans, cards with overdraft in 2025

MOSCOW. April 24 (Interfax) - VTB might launch a payday loan service or cards with overdraft this year, the Russian state bank's vice president and deputy CEO, Georgy Gorshkov said.

"We're not striving to go into an industry with unjustifiably high interest rates for clients, believing this to be wrong. We won't launch this business in this form. We did our pilot, it did not show high performance and strong demand for microloans among VTB's existing customer base. What I would like to launch, and I think we'll do it in 2025, is either a payday loan service or a debit card with overdraft service. Offering VTB clients such products is only possible to expand the accessibility of credit taking into account all the Central Bank's requirements," Gorshkov said.

"This is not a loan at a microfinance organization, it's a short-term loan that is completely affordable in terms of interest rate or commission that the client can guarantee covering with the next payment of funds from their employer. This is the situation where you simply went somewhere and you didn't have enough money in your account. And such a client will not need to apply anywhere, they will be assessed ahead of time by our models and they will just have the option to turn on such a service in the mobile app," Gorshkov said.

In global practice, card overdrafts amount to 10-15% of a person's monthly income, he said.

"Our objective is not to over-lend to a client, our objective is to help the client who miscalculated their money," Gorshkov said.

VTB's press service said the new service will essentially enable customers to get a portion of their pay on any day they need it. Interest will not accrue like on a classic cash loan, the bank will automatically withhold the advanced amount when the client's salary is deposited in their account. This will essentially enable customers to get quick access to money they already earned as they need it, giving them more flexibility in managing their finances, the bank said.

The bank is still working out the details of the product.