Sberbank Discusses the Influence of Elevated Interest Rates on Small-scale Enterprises
In a recent development, Russia's annual inflation rate stood at 9.39% as of June 30, according to data from the Ministry of Economic Development. Despite this, the Bank of Russia has taken steps to ease monetary policy, lowering the key rate to 20% on June 6, down from 21% since October 2024.
Deputy Governor Alexei Zabotkin suggested that a "more significant step" in rate reduction could be considered at the July meeting, as compared to the June reduction of 1 percentage point. The decision on the interest rate will depend on various factors, including data on the economy, labor market, credit activity, inflation itself, and inflation expectations.
The challenging financial situation faced by small businesses in Russia, particularly in accessing working capital, has been a point of concern. To address this issue, several measures and initiatives have been implemented.
Small and medium-sized enterprises (SMEs) meeting certain criteria are automatically included in a federal SME registry. This grants them access to special government support measures, including the possibility of preferential loans that improve working capital availability. SMEs registered under the federal framework can also benefit from tax incentives, such as the simplified tax system, which exempts them from paying Value Added Tax and reduces corporate profit tax if certain ownership and financial thresholds are met.
The government, in collaboration with regional authorities and private actors, is actively working to improve the investment climate. This includes comprehensive support for investors, with tax benefits and reductions in bureaucratic burdens, which can help SMEs access capital more easily and at lower cost.
Events such as the "My Business Forum – 2025," supported by the Ministry of Economic Development and regional governments like Saint Petersburg, play an important role in building bridges between SMEs and larger companies, financial institutions, and government programs. These forums facilitate knowledge exchange, partnerships, and access to new funding opportunities, helping SMEs navigate capital access challenges.
Ongoing monitoring and adaptation of these support mechanisms are crucial, with the government regularly seeking feedback from businesses to adjust policies and share successful regional practices nationwide, aiming to create a more conducive environment for SMEs to secure working capital and grow sustainably.
However, despite these measures, Russian SMEs still face substantial financial pressure, including wage arrears and challenges related to high interest rates on loans. This underscores the critical importance of continued government support and improved access to working capital.
In a plenary session at the St. Petersburg International Economic Forum (SPIEF) 2025, President Vladimir Putin highlighted that inflation dynamics are developing better than many experts and the Central Bank expected. He also emphasised the need for large companies to support small businesses.
Sberbank has seen an increase in requests for restructuring from small businesses since October 2024, indicating the ongoing struggle for these businesses to maintain financial stability. Moreover, large and largest companies often pay small businesses with delays, exacerbating their financial difficulties.
The Central Bank of Russia has scheduled a meeting on the interest rate for July 25, which could potentially bring further relief to small businesses in their quest for improved working capital access.
- To address the financial challenges faced by small businesses in Russia, particularly in accessing working capital, the government has initiated several measures such as providing SMEs with access to special government support measures, including preferential loans that improve working capital availability.
- Recognizing the critical financial pressure faced by small businesses, President Vladimir Putin highlighted at the St. Petersburg International Economic Forum (SPIEF) 2025 the need for large companies to support small businesses, and during the Central Bank of Russia's scheduled meeting on the interest rate for July 25, potential relief for small businesses in their quest for improved working capital access could befound if the key rate is further reduced.
