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#19 - JRL 7251
Moscow Times
July 15, 2003
Poll Finds Most People Wary of Bank Accounts
By Alex Nicholson

The average Russian consumer would much sooner tap the pockets of a family member or friend than use a bank, according to the results of an unprecedented nationwide survey released Monday.

Seventy-two percent of Russians prefer to borrow from their friends and relatives, while 60 percent have "never used a bank account," according to Moscow-based mail order and retail distribution firm PPE, which used the postal system to survey 150,000 people.

Analysts said the lack of trust in the nascent banking industry is hardly surprising, given the average citizen's experience with banks over the past decade -- especially 1998, when millions saw their life savings vanish overnight in the financial collpase that August.

"Generally the picture is true," said Richard Hainsworth, banking analyst at Renaissance Capital. "Russians don't trust commercial banks, though things are getting better."

Sheer paperwork is a barrier for many.

"Until recently it has been very difficult for an individual to physically get through all the documents required for a loan," he said.

Most people do not consider state-controlled retail banking monopoly Sberbank, where most Russians pay their utility bills and have an account of some kind, a traditional bank.

PPE said the poll had a response rate of 33 percent, which is more than 10 times the European norm.

The "typical" Russian consumer, PPE discovered, is a woman between the ages of 35 and 55 who earns the equivalent of 250 euros ($282) per month. "She" is married, has one child, a cat, and prefers to spend her holiday either in her two-room apartment or dacha than abroad. And, if given up to 300 rubles to spend on alcohol, she would opt for wine, although vodka is the choice if given more than 300 rubles.

Day-to-day living expenses consume most of Russians' disposable income, half of which goes to food, household goods, and utility bills. Leisure spending accounts for just 2.09 percent.

Most respondents are employed in the education sector, followed by the health and retail industries.

Despite the aversion to banks, the survey suggests the demographics of the population are looking more and more Western.

"The marriage rates, home ownership, the single-child families emphasize the moral structural code while the heightened interest in health, number of pets owned, interest in wine and the proportion of individuals that have attended secondary education [62 percent have completed secondary education] reflect an increasingly Westernized society," PPE concluded.

The fact that 89 percent of respondents have no mobile telephone and 96 percent have no access to the Internet suggests that the development potential of the consumer market is huge, it said.

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