#16 - JRL 7247
Cash-loving Russians shy away from banks
July 14, 2003
AFP

Russians remain weary when it comes to banks, preferring to borrow from friends rather than the financial institutions that they still fear are highly unstable, a study published Monday found.

Sixty percent of Russians polled said they had never used a bank account, according to a study by the PPE mail order and distribution services group.

And 72 percent of Russians prefer to borrow money from friends and relatives, the study found.

Russia's 1998 financial crisis shook the banking sector to its core, with a large number of banks declaring bankruptcy and even more going insolvent.

If a credit card were offered to them, 59 percent of those polled said they would not use it, PPE found.

With the 1998 ruble collapse a not so distant memory, Russians are thought to stash an estimated 75 billion dollars (66 billion euros) at home, while banks hold just 30 billion dollars in private accounts.

PPE polled 150,000 consumers across Russia with monthly salaries ranging from 30 to 300 euros a month, with an average of 250 euros.

The state statistics committee said in January that Russians' average monthly salary was 122 dollars (108 euros).

An overwhelming 93 percent of those interviewed said they found their salaries insufficient and just eight percent said they were regularly able to put money away into savings.

Most Russians invest in stereo systems and microwave ovens when they have some cash to spare, while just 67 percent of those polled owned a car, PPE found.

Russia's rapidly growing telecoms sector still has not managed to touch every Russian home, with 64 percent owning fixed telephone lines, 11 percent owning mobile phones and just three percent with Internet access.

And vacations abroad remain a luxury, with just two percent going on holiday outside Russia. Yet 59 percent of those polled said they owned a traditional Russian dacha for summer weekend holidays.

The poll found that Russians are no strangers to home ownership, with 59 percent owning their own house or apartment and just 4.8 percent renting. Nine percent of those polled still live in Soviet-era "kommunalka" apartments housing several families.