Experts expect a reduction in lending to small and medium-sized businesses
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In 2024, it will not be possible to maintain record growth rates in lending to small and medium-sized enterprises (SMEs), experts believe, since banks’ interest in the segment is declining. Analysts talk about the possibility of maintaining positive dynamics, but only by 10–20% versus 30% at the end of 2023. Market participants note that leasing, in which SMEs are one of the key clients of the retail segment, may suffer as a result.
According to Central Bank data published on February 26 (.pdf), the past year turned out to be a record year both in terms of the volume of loans issued and the overall size of the SME lending portfolio. Banks issued 15.9 trillion rubles to such clients in 2023, which is almost 40% higher than the result of 2022. The loan portfolio increased by almost 30%, to RUB 12.4 trillion.
The general director of the SME Corporation, Alexander Isaevich, explains the dynamics by “a multi-stage and significant increase in the key rate, which provoked a rush of demand for lending from SMEs.” For more than six months the key rate remained at 7.5%, but by the end of the year it reached 16%.
According to the Bank of Russia, in the second half of the year the weighted average rate on SME loans up to one year increased from 11.4% to 13.9% per annum, on loans over a year – from 10.2% to 13.4% per annum.
At the same time, Suren Asaturov, deputy director of ACRA’s group of financial institution ratings, clarifies that rates on SME loans were initially noticeably higher than in other segments, so borrowers in this segment turned out to be “less sensitive” to the increase in the key rate.
State support programs helped to contain the rise in prices and reduce the level of risk on issued loans, Mr. Isaevich clarifies. According to him, thanks to the guarantees of the National Guarantee System, the operator of which is the SME Corporation, the business was able to attract financing of 1 trillion rubles. Director of the NKR Financial Institutions Rating Group Egor Lopatin adds that the intensification of project financing in housing construction could also contribute to the high positive dynamics of SME lending.
The absolute record for issuing loans to SMEs per month was set in December 2023 – RUB 1.9 trillion. Experts explain that the issuance of loans to SMEs has a pronounced seasonality. According to Suren Asaturov, in December, companies “traditionally receive or wait for payment under budget contracts, for which SMEs usually take out loans.”
However, in 2024, experts expect a slowdown in lending to the segment.
As Suren Asaturov explains, at the end of last year, banks “remained interested in maintaining the growth of balance sheets, including through more profitable loans to SMEs, since the revaluation of interest rates on assets outpaced the dynamics on liabilities.” However, he believes, “in the near future this effect will be minimized due to the gradual synchronization of banks’ rates on liabilities and assets.”
According to the director of bank ratings of the NRA, Konstantin Borodulin, small businesses themselves quickly adapt to changes in current working conditions and external factors, which was clearly visible in 2022 when restructuring supply chains and adapting to new realities. “Therefore, we can expect that in 2024, although a certain volatility in the dynamics of issuances is possible, in the absence of external shocks the trend will definitely be growing, and we can predict a quarterly growth in issuances in the SME segment of 10–15%,” the expert believes. According to Egor Lopatin, the debt of SMEs to banks by the end of 2024 could reach 15 trillion rubles, that is, an increase of about 20%.
The situation may affect the leasing business. According to Illarion Demchikov, director of business development at Alfa-Leasing Group of Companies, small businesses form more than 60% of the volume of new business in retail leasing: “If a change in the credit policy of banks is associated with a deterioration in the quality of the portfolio, an increase in overdue payments, then leasing companies will also will reconsider their approach to assessing clients.” In addition, Mr. Demchikov clarifies, since the third quarter of last year there has been a “decrease in demand for leased items purchased by clients of the construction industry since the end of the third quarter of 2023.”
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