July 20, 2017 – Fort Russ News –
Ed: DPR News, our usual source of Russian language news from the Donbass, has run an interesting story on the soon to be available loans in the Donetsk Republic. It is true that businesses require lending in order to grow, and the piece is run as a good-news story. However when listening to the representative on video, something doesn’t quite make sense.
The Chairman of the Central National Bank (Donetsk), Irina Nikitina, has spoken of the steps being taken by the Bank to resume lending in the Republic.
“We will work with a finance company to create credit cards. that will work only in non-cash transactions. Cash at ATMs and at banks can not be obtained with these cards. This is one of the pilot projects, which now occupies the central National Bank with the involvement of investors in this area, and it is nearing completion. We have already ordered plastic credit cards and, most likely, during this quarter, our citizens will already be able to use these cards.” – Irina Nikitina said.
She stressed that the loans will not be provided by the Central Republic Bank, but a financial services company, which will work out all the lending options. The loans will be short term – up to one year.
“We expect that the first stage of loans will be mainly aimed at employees of government organizations. The second stage – the pensioners. And the third – it is our business entities that are registered in the Donetsk People’s Republic. ” – added the Chairman.
Ed: This raises a number of questions – why would a Donetsk pensioner need a credit card, the interest on which they may not be able to pay? Similarly, why would a Donetsk enterprise borrow loans, the interest for which is not currently favourable in light of the destruction of a healthy market place that has taken place on the territory.
Thirdly, a government lending structure working through a private lending company is altogether unusual. Developed countries that can be said to have a social-democracy lean try to outlaw private shark loan creditors, as opposed to let them roam free. It is possible the story was not covered in enough detail, but the nature of it remains dubious.