Business takes a break – Kommersant FM

Businesses are refusing new projects because loans are too expensive. The entrepreneurs themselves told Kommersant FM about this. On September 15, the Central Bank raised the key rate to 13%. This is the third increase in two months. Elvira Nabiullina explained the decision by saying that the economy is overheated and the demand for loans needs to be cooled. Otherwise, inflation could accelerate significantly. What does this mean for business? Ivan Yakunin found out.

For many entrepreneurs, the debt burden increased automatically on September 15. The fact is that, according to the Central Bank, almost half of corporate loans are now serviced at a floating rate. And you just have to accept the fact that the monthly payment has increased by one percentage point. In general, the Central Bank’s decision is called expected, so entrepreneurs tried to get a loan on the old terms before Friday. The general director of the Orange Fitness and City Fitness fitness club chains, Anastasia Yusina, did not succeed:

“Loans with our low margins, even without such a key rate as now, were too high and unaffordable. We paid between 13% and 18%. Sometimes banks offered at 23–25%. Of course, we did not take out such loans. We have already had negotiations with banks, which, as I understand, will probably be suspended at the moment. We are unable to service the loans we wanted to take out at the new rates. Example: our club has American equipment, spare parts for which cannot be brought in. I would rather take some Chinese or Korean working equipment – new, unbreakable.”

But the Central Bank is determined. Elvira Nabiullina warned that the market did not react enough to previous rate increases in July and August. Meanwhile, the ruble still looks quite weak, which creates risks of rising prices. This contradicts the regulator’s goals, so economic growth in the second half of the year will be “more moderate.” The founder of the Persona beauty salon chain, Igor Stoyanov, agrees with this. Borrowed funds are needed not only by his partners, but also by his employees, explains Kommersant FM’s interlocutor:

“Basically, the credit burden increases among craftsmen who take money for development, training, and education. This, of course, will set us back a little. Now we will recalculate or raise prices in October due to inflation and rate changes. 15–18% is what we expect from banks. The franchise will definitely not return that kind of money. Therefore, most likely, we will stop lending and wait.”

And you’ll have to wait a long time. According to the head of the Central Bank, this time the cycle of high rates will continue until the regulator “is convinced of the sustainable nature of the slowdown in inflation.” The forecast for next year has already been rewritten: in 2024 the key rate will also be about 12%. There will be no repetition of the situation in 2014 and 2022, when the regulator quickly reduced the cost of borrowing, Nabiullina promised. The owner of the Lazovsky House construction company, Maxim Lazovsky, has already felt this:

“We are already seeing acquisition refusals and a decline in demand. This started back in August. Now, after the decision of the Central Bank, we expect an outflow of clients who were at the negotiation stage. Most likely, the sales plan that we formed back in June will be 30% less – this is based on the results of the second half of the year.”

In general, this is the effect the Central Bank sought, otherwise it is simply impossible to reduce the rate of price growth. True, there is a problem. Elvira Nabiullina pointed out the abundance of preferential lending programs due to which the effect of increasing the rate is greatly limited. The state subsidizes loans from the budget, demand remains, and the Central Bank is again forced to respond with a rate. Therefore, the regulator does not exclude that Friday’s increase was not the last in 2023.

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