Central regions | Finance, business

Study: number of SMEs in Russia remains low

9 Nov '17
A new Institute for Integrated Strategic Research (IISR) report on small- and medium-sized enterprises (SMEs) in Russia found that the growth rate for SMEs remains low despite what the Russian government has widely touted as its significant support for small businesses, the US-Russia Business Council reported, citing a publication by Kommersant.

The number of SMEs has grown only 1.3% to 5.8 million to date this year, with all of that growth coming from microenterprises (businesses with 15 or fewer employees). The study found that the number of small enterprises (16-100 employees) actually shrank by 1.6%, while the number of medium-sized businesses (101-250 employees) fell by 3.4%. Moscow and St. Petersburg have seen the highest rates of growth in SMEs this year, with the number of small business increasing 5.2% and 3.8%, respectively.

The Institute noted that microenterprises have been able to succeed because they are generally more flexible than the larger businesses, are easier to open and close and in many cases face a simplified tax regime. The analysts also noted that medium-sized enterprises are less likely to be eligible for state support, leading to greater declines in the number of such businesses.

IISR also pointed to the lack of development of regional financial institutions as contributing to the lack of progress in developing SMEs. According to the Central Bank of Russia, SMEs account for only 16% of all commercial loans in Russia.
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