Small and medium-sized enterprises in Russia: Social Studies, Statistics And Publications. №4, December 2016

29 December 2016

Small and medium sized enterprises are important sectors for sustainable development of the business society. The roll of these enterprises is increasing, especially so during periods of crisis, when the solution of the issue is increasingly dependent on the actions and commitment of the entrepreneurs. 

The economic turbulence had by the end of 2014-2015, affected the financial sustainability of the small enterprise’s entities and had negatively influenced the banking sector with regards to their willingness to lend to this segment. The prevailing situation has resulted in the reduction of the lending market for small and medium-sized enterprises by 28% in the first half of 2016. A slowing of business activities within the enterprise’s sector has been observed. This can be accounted by the entrepreneurs being forced to abandon financing through the normal routes of the banking sector, due to high rates of interest having a negative effect of profits. 

The banks cite their attitude to lending to the small and medium sized enterprise sector and justify their high interest rates because of the high risk levels taken on their part.  During the current conditions of economic recession, the government has taken several steps. These include, the start of a program of concessional lending to the corporation of SMEs, the start of a business navigator, the development and implementation of a program which aimed at supporting youth, female and social enterprises.       
Despite the fact that the effectiveness of the measures taken is still at a low level, the outlook for the medium term is more encouraging for an improvement in the situation of the entrepreneurs, which it is hoped will stimulate activity and in turn growth within the sector. 

Type of publication: Industry report

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