An increasing number of Russian companies are failing to service their loans amid an economic slowdown and a high key interest rate. As of October, out of nearly 714,000 legal entities and individual entrepreneurs with outstanding loans, 171,000 — or 24% — had missed payments. This figure has risen by 6 percentage points in a year and has reached its highest level in the past two and a half years, according to Central Bank data cited by Izvestia.
The volume of overdue loans also grew by 7.2% year-on-year, reaching nearly 3 trillion rubles — the largest increase since autumn 2023. At the same time, total corporate debt rose by almost 10% over the year and exceeded 80 trillion rubles by the end of the third quarter. The Central Bank noted that banks had been expanding corporate lending over the past year — from January to October, the corporate loan portfolio grew by 6.2% (9.5% over 12 months). As the total loan portfolio increased, overdue debt rose proportionally, the regulator explained.
The main reason companies are unable to service their loans is the high key rate, which remained at a record 21% for six months and was only reduced to 16.5% in November. This made borrowing extremely expensive, putting significant pressure on highly leveraged companies, says Valery Tumin, a member of the Expert Council on Digital Economy Development under the State Duma Committee on Economic Policy. For businesses with profitability below 10–15%, the situation is especially painful. Small and medium-sized enterprises — which must borrow at market rates — have suffered the most.
When the key rate rises, the cost of loans increases, which leads to higher monthly payments, independent expert Andrey Barkhota noted. At the time they took out loans, companies assumed that the period of high rates would be short, but things turned out differently, he added. According to him, businesses currently lack the cash flow needed to service accumulated debts, meaning the number of defaults could grow two to three times in the near future. According to the rating agency Expert RA, at least 26 companies declared technical default between January and October 2025, compared to 11 in all of 2024.
The risk of defaults is highest in sectors with low margins and high debt loads — real estate development, retail, and certain manufacturing segments, Tumin says. As of October, 56% of total corporate debt was concentrated in manufacturing, finance, and professional, scientific, and technical services, according to Central Bank data.
Rising debt pressure may lead not only to a wave of corporate bankruptcies but also restrain economic growth, warns private investor Fedor Sidorov. Meanwhile, government support for large systemically important enterprises could fuel inflation, notes Natalya Milchakova, lead analyst at Freedom Finance Global. The further outlook will depend on how quickly the economy adapts to new conditions and on the pace at which the Central Bank lowers the key rate, Tumin concluded.
