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Ministry to toughen rules for repaying mortgage using ‘maternity capital’

21 March 2017

The Ministry of Labour and Social Protection will strengthen control over the spending of ‘maternity capital’ used to purchase housing and will remove organizations not controlled by the Central Bank from the list of operators of these funds, the ministry’s press service reported citing Minister of Labour and Social Protection Maxim Topilin.

The ‘maternity capital’ programme provides federal subsidies to multiple-child families.

This includes organizations with different forms of incorporation such as public joint-stock companies, open joint-stock companies, and closed joint-stock companies, Rossiyskaya Gazeta explains.

“The lack of control over such organizations results in the unlawful spending of ‘maternity capital’ funds”, the minister noted.

The ministry has proposed making the appropriate amendments to the law on maternity capital. In this case, the ‘children’s’ money could be used to pay an initial instalment, repay the principal, and pay interest on loan agreements concluded solely with banks or a credit consumer cooperative.

Today, agreements with other organizations make up roughly 7 percent of the total number of requests for the distribution of ‘maternity capital’ funds. Micro-finance organizations were previously excluded from the list.

The ‘maternity capital’ programme is one of the items to be considered as part of the government’s action plan for the period until 2025. Russian Prime Minister presented the main parts of the action plan at the Russian Investment Forum in Sochi.

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