10% of Russian SMEs face closure

RUSSIA / FSU POLITICS - In Brief 26 Feb 2021 by Alex Teddy
On February 24 a government study showed that a tenth of small businesses are about to fold. The business ombudsman conducted the study. The survey was published on RBK. The small business sector is irate that almost all government aid has been directed at major corporations, i.e., those most able to weather the storm.Many small businesses are filing for bankruptcy. A third of businesses said incomes were still declining even though most coronavirus restrictions have been lifted. Only 10% said their revenue was back to pre-pandemic levels. The government allowed tax delays, a moratorium on bankruptcy and interest-free loans to pay wages up to USD 165 per month. The paperwork needed to access this aid made the aid unattainable by many. The majority of SMEs have been unable to avail themselves of this state aid. Of those who attained it, half said it was unhelpful, and many will be unable to pay back the loans. However, the loans will be forgiven if a firm retains 90% of its pre-pandemic workforce.The feel-good factor is gone. Consumer spending is down, and inflation is up. However, the economic contraction is smaller than any other major economy.

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