BNPL lending in the Russian Federation: risk assessment and legal regulation issues

Abstract

Civil law, based on the principles of autonomy of will and dispositiveness, allows economically identical relationships to be formalised through various contractual constructions. The purpose of such non-standardisation is often to circumvent the law in order to maximise profits or reduce the cost of compliance. In the bancassurance sector, for example, there is a practice of selling collective insurance by including the borrower (the insured) in an insurance policy already formed by the bank (the policyholder) and the insurer. Under this insurance model, many legal guarantees of the borrower’s rights simply do not apply, and therefore the legal regulation has required significant changes. Since 2021, a similar phenomenon — «instalments», «payment by instalments (shares)» or BNPL-lending — has spread in the commercial sphere. The article analyses BNPL-lending models, their risks, considers the mechanism of operation of such lending, assesses the integrity of such practices, identifies problems and prospects of legislative regulation of such «consumer lending».