State support for SMEs needed by the state will require additional efforts

Existing models of financial assistance to small and medium-sized businesses in the Russian Federation do not contribute to expanding the coverage of recipients of state support: with direct distribution of funds by the state and development institutions, the risks of financing “zombie” companies are high. The inclusion of intermediary banks in this structure reduces the risks of ineffective support. However, as an analysis of the two-tier support system shows, its recipients are already familiar to banks, stable, relatively large and mature companies, and in order to extend support to the “left out” segments it is necessary to introduce additional requirements for borrowers.

The author of the article “Factors for the participation of small and medium-sized businesses in the two-tier system of state support in Russia,” published in the journal of the New Economic Association, Anna Bakaikina (Moscow Agency for Strategic Development) states that the current programs for supporting SMEs with the participation of banks do not contribute to the increase in the availability of borrowed funds for small and medium-sized enterprises. medium business.

The two-tier system, let us explain, includes financial intermediaries (commercial banks, factoring and leasing companies), who select SMEs and distribute support among them, receiving it from development institutions. In a single-level system, development institutions do this directly, which ensures high efficiency of support for start-ups and socially significant projects, the financing of which is risky for commercial players, but creates conditions for massive support for ineffective “zombie” companies or projects affiliated with institutions. The inclusion of intermediary banks in the system reduces these risks: credit institutions have effective methods for assessing the risk and profitability of projects.

However, as the study showed, with a two-level mechanism for supporting SMEs (mainly through state banks, in the form of soft loans, partial guarantees and a combination of a soft loan and a 100 percent guarantee) in 2016–2018, the recipients of support were companies that already had access to financing from commercial banks . “Assistance is received by relatively large, mature companies that can provide commercial banks with a significant amount of official documentation over a long period of time, which allows state banks to use their classic approach to assessing credit risks,” the author writes. At the same time, banks do not lend to risky borrowers with high potential.

To expand the coverage of support recipients, regional and federal development institutions are recommended to create conceptually new programs for unreached or poorly covered categories of SMEs – for example, through additional restrictions on final borrowers in terms of number, assets, and revenue.

It should be noted that after the pandemic, the government sought to increase the coverage of SMEs with state support – for example, the SME Corporation is constantly expanding the number of banks participating in programs to stimulate SME lending in the regions; the “umbrella” lending mechanism also contributes to increasing the availability of loans for SMEs (if there is a shortage of collateral, an entrepreneur can count for the guarantee of the SME Corporation). However, due to the need to concentrate limited resources on priority sectors, the principles of supporting SMEs are being adjusted – now the “umbrella” program will be “targeted”. At the same time, the government will have to learn to direct support measures with the participation of intermediaries from companies familiar and familiar to banks to promising projects that are needed by the economy.

Diana Galieva