Russia’s new law on mortgages came into effect last week. (Izvestia, July 29; Rossiiskaya gazeta, July 30) Its aim is to widen the access of ordinary, middle-income families to the credit necessary to purchase their own homes. The Moscow city government has responded by setting up a fund that will lend money to potential house-buyers at lower rates of interest than those available from most of Russia’s commercial banks. The fund will come into operation in September. There are hopes that other regions will follow Moscow’s example.
Ivan Grachev, one of the drafters of the law and a member of the State Duma from the Republic of Tatarstan, predicts that access to mortgages will enable about a third of Russia’s population to improve their living conditions by buying their own homes–until now, a privilege available only to the very rich. Grachev says that the law will also help to get the economy growing by fueling a building boom. For these reasons, Grachev boasts, the law will have a more positive effect than all the government’s “anti-crisis” measures taken together. (Izvestia, July 29)
Grachev told Vechernyaya Kazan that it had taken three years to get the bill through the Duma. Many deputies opposed the bill, Grachev said, until they realized that it was middle-income families, not the three to five percent of rich ones, who stood to benefit. He said the law draws on German, British and American models. It will allow people to borrow money for twenty or thirty years at an estimated annual rate of interest of between 6 and 7 percent. (Vechernyaya Kazan, July 29)
CHECHNYA GETS ACTING PRIME MINISTER.