YEREVAN, November 29. /ARKA/. The credit burden of Armenian consumers will be limited by law, Armenuhi Mkrtchyan, head of the Center for Consumer Rights Protection and Financial Education of the Central Bank, said at a parliamentary hearing on credit policy and financial literacy.
She said a new regulation is being developed aimed at protecting consumer rights. It will set the maximum ratio between credit and income of borrower.
“International studies show that a person can withstand financial shocks when his/her credit burden does not exceed 40-60% of their monthly income. In Armenia these figures are often higher,” Mkrtchyan said.
Andranik Grigoryan, the head of a Central Bank department overseeing financial stability, noted in this connection that the new regulation will apply to all types of consumer lending, including mortgage lending.
‘The bill to limit the credit burden for the consumers implies that the consumer cannot independently assess the additional burden of payments for himself/herself and this is why, it is to be limited to their income index,” Grigoryan said.
According to him, in this case, banks or credit organizations will not be able to provide a loan if a consumer’s total income will be used to make payments on credit obligations. At the same time, he emphasized that the regulation will apply to all types of financial activities. –0–
