KYZYL, Russia -- Nadezhda Sat's story is a familiar one to residents of the south Siberian region of Tyva. Ten years ago, she took out a loan to buy a car.
"There are expenses in Tyva that you simply must get a loan for," she told RFE/RL's Russian Service. "Such as a car. Public transportation is very bad -- we don't have commuter trains or trams or trolley buses. Even the normal buses run sporadically. And to simply save up money and buy a car is not realistic, particularly since cars keep getting more expensive."
The reason Sat – who lives in the regional capital, Kyzyl, a city of some 110,000 about 3,600 kilometers east of Moscow -- needed a car was that her son's kindergarten was 10 kilometers from her home.
"We also have big problems with kindergartens, " she explained. "When we were finally able to get a spot, we had to take it. And there isn't any public transport there, so I had to take a loan to buy a car. I got a used one, a foreign make, and paid for five years."
Then her daughter finished school, and Sat knew there were no opportunities for her higher education in Tyva. She took another loan to send her daughter to an institute in another region.
"So, for 10 years, I paid loans for a car and to send my daughter to an institute," Sat said, adding that she and her husband paid about 40 percent of their combined monthly income to meet the payments.
As far as the last figure goes, Sat may have been lucky. A recent study by the pro-Kremlin All-Russia Popular Front (ONF) found that Tyva is the most indebted region of Russia, with locals on average paying 78 percent of their income to cover their debts.
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'1,000 Percent Interest': Consumer Debt Weighs On Russian Households
"The level of indebtedness in Tyva, if it is 78 percent, is truly fantastic," said Valery Mironov, a professor of economics at the Higher School of Social and Economic Sciences in Moscow, adding that the same study found the national average indebtedness to be an already-worrying 35 percent. "And that shocking figure came from a pretty serious study. Indebtedness of 40 percent is already quite bad, and here they have found 78 percent. That means essentially that for every 10,000 rubles ($133) of salary they receive, they pay 8,000 ($107) on their debts."
One-Third Of Population Below 'Survival Minimum'
Elmana Mekhtiyeva, president of the National Association of Professional Debt Collectors, told RFE/RL that the situation in Tyva is particularly worrying because wages there are so low.
"Tyva really has always been one of the regions with particularly high rates of indebtedness," she said. "So the situation is not new, but it definitely deserves attention."
Tyva is Russia's most impoverished region.
The ONF study was based on figures from the Central Bank, the government statistics agency Rosstat, and major banks.
Additionally, according to the Labor Ministry in August, Tyva has the country's highest poverty rate, with 34.1 percent of the population living below the official "survival minimum." The national average, according to a Rosstat report in April, was 12.1 percent.
The average wage in Tyva is about 37,000 rubles ($495) a month, and the official unemployment rate is nearly 12 percent.
Dogs wander the streets of Kyzyl's ramshackle Shanghai district where many people live in dilapidated accommodation without water, sewage, or heating.
"Essentially, people are just surviving," local resident Ayana Khruma told RFE/RL. "If they want to improve their standard of living even just a little -- get a new refrigerator or a washing machine – they need a loan…. It takes a decent sum to get children ready for the school year or to buy winter clothes. It is very hard. They aren't taking loans to buy a new Toyota or an Audi…. People take loans for almost everything because they simply have no money."
She added that people in small towns and villages are often reduced to getting loans to buy food, particularly when salaries and social payments are delayed. "The situation is very difficult," Khruma said.
Indebtedness Treadmill
The microlending industry in the region is booming, with the corresponding high interest rates.
"Microloans are advertised very aggressively," explained another local woman, Ayana Mongush. "They promise loans at 1 percent, but not everyone understands that they mean 1 percent per day. But people are just tired of not being able to buy anything, tired of living from paycheck to paycheck. So they take the loans without thinking about what will come next."
According to one analyst, many people in Kyzyl and other parts of Tyva fall into debt because of the region's poor infrastructure and social services.
Kyzyl resident Chechek Saryglar got on the indebtedness treadmill in 2008. For years, she paid half of her 20,000 ruble ($270) monthly salary to the bank. Some months, she couldn't make the payments and resorted to microloans. When she missed payment on them, the interest rates skyrocketed, and debt collectors began to hound her.
"They would call day and night," she recalled. "'We know where you live. We know your family. Go and sell a kidney.'"
"I began drinking," she admitted, adding that thoughts of suicide also crossed her mind.
Now she is living with her second husband and has quit drinking. Earlier this year, she finished paying her bank loan, but she is still dealing with the micro-lenders.
"I borrowed 50,000 and need to pay back 100,000 rubles," she said. "But it is easier now. We have a total monthly income of 40,000 rubles -- our salaries, plus what I can earn from sewing and crafts. And my older children have moved out and support themselves. I still have debts and the collectors still call about them, but it doesn't bother me as much."
Mironov said that many people in Tyva, like Nadezhda Sat, fall into debt because of the region's poor infrastructure and social services. In 2020, the region contributed 7 billion ($93 million) rubles to its budget and received an additional 18 billion ($240 million) from Moscow. The region has no railways, which raises the prices of all goods and makes businesses reluctant to open there.
"What can the government do to support such a region?" he said. "The government can at the very least ensure that basic social services are provided at a normal level -- that is, at a level that lets people use them without added difficulties. I'm talking primarily about health care and education."
Meanwhile, the region's debt problems are mounting.
"The main thing is to make your payments and not ruin your credit," Khuruma said. "And then you can buy something to eat."