Expensive loans did not become an obstacle to business development
Entrepreneurial activity remains high, despite the shortage of personnel and difficulties with lending. High interest rates on loans force businessmen to more actively turn to government support measures. This was discussed by participants in the round table "State of the Economy - 2024. Challenges and Achievements", organized by Rossiyskaya Gazeta together with the TT Finance portal.
Valery Kalugin, the Commissioner for the Protection of Entrepreneurs' Rights in St. Petersburg, called St. Petersburg's economic indicators optimistic. "In particular, the industrial production index, according to the latest data from Petrostat, in the period January - August 2024 amounted to 111.2 percent compared to the same period last year," he said. - Here we note the extraction of minerals - 123 percent and manufacturing - 112.2 percent. The highest indicator in manufacturing by type of economic activity: among manufacturers of motor vehicles, trailers and semi-trailers - an increase of 3.4 times, other vehicles and equipment - 133 percent, computers, optical products - 1.6 times, clothing - 133 percent, electrical equipment - 123 percent."
According to Rosstat, the entrepreneurial confidence index in the manufacturing industry in August 2024 reached 7.1 percent. In August 2023, it was only 4.6 percent. "Thus, large industrial enterprises continue to demonstrate optimism," Valery Kalugin summed up.
According to Rosstat, the index of business confidence in the manufacturing industry reached 7.1 percent in August 2024. In August 2023, it was only 4.6 percent. "Thus, large industrial enterprises continue to demonstrate optimism," Valery Kalugin summed up.
Vaccination against crisis
Alexander Khaikinson, director of the small and medium business department of the St. Petersburg branch of PSB, spoke about the RSBI index, the data for which is obtained through a survey of entrepreneurial sentiments conducted by the bank and OPORA Rossii since 2014. "In the long term and relative to 2023, we see an increase in the business activity index," he stated. "The current value for August is 54.7 points (figures above 50 index points mean an increase in business activity, below - a decrease). A year ago, the value was 0.7 points lower. Nevertheless, in August, the index value was worse than in July, when the value was 55.8. This happened mainly due to the increase in the key rate of the Bank of Russia. At the same time, we see a trend that, based on the results of the last few months, the sales component has dropped quite significantly - for the first time in six months, it went into negative values, 49.3 points. Every third (32 percent of entrepreneurs) reported a drop in sales. The increase in the key rate should have led to this: a drop in sales, a decrease in prices, a decrease in inflation. This trend was also observed in July relative to June."
According to Alexander Khaikinson, the business need for additional financing is slowing down, but it is still quite significant. "According to our survey, we see that business has received a very good vaccination, its immunity to the crisis is high," the financier concluded. "It is quickly rebuilding. That is, there are still entrepreneurs who continue to invest in times of crisis. On the one hand, banks now have favorable conditions for placing funds on deposits, but those who have strategic planning find opportunities to enter into investment projects and achieve the desired results. We can provide financing for 10-15 years. Yes, it is expensive now and it will not be much cheaper in the next year or year and a half, but having a link to the key and due to the cyclical nature of the availability of financing, we can say that the average rate will be 12-15 percent."
In relation to St. Petersburg, the banker highlighted the assessment of the availability of credit - it is higher than in the country: 59.1 points against 58. "Here the key role is played by the Fund for Assistance to Small Business Lending, which ensures equal access of SMEs to financial and credit resources," he explained.
Available resources
Victoria Tishina, founder of the women's clothing brand "Fashion House of Victoria Tishina", also highly praised the activities of the aforementioned foundation. "We have been cooperating with the Foundation for a very long time," she said. "We recently calculated how many loans and guarantees we took from them. The amount came to over 50 million rubles. We are very pleased with this cooperation."
The entrepreneur noted that her business has seen some growth, despite the negative impact of rising prices for purchased raw materials. "Everything is fine in my company because we have taken a slightly different management path," shared Victoria Tishina. "We create clothes that are in demand. We have occupied a niche of quality and design. The consumer has moved to the stage of conscious purchase. That is, he chooses a coat that, even if it costs 35-40 thousand, will be worn. We are waiting for the banks to lower the key rate so that we can begin to cooperate for the development of the company. Now we are intensively training personnel in the new realities, creating a team. We are not particularly expanding the scale of production. We are waiting to see how the consumer will behave in the conditions of high bank rates."
Executive Director of the Fund for Assistance to Small and Medium-Sized Business Lending in St. Petersburg Alexandra Pitkänen stated that in the context of high interest rates, when market loans are becoming increasingly expensive for businesses, the role of state programs and support funds that allow small and medium businesses to obtain more favorable financing terms is increasing. She cited figures characterizing the scale of activities to support entrepreneurs by the NPO "Fund for Assistance to Small and Medium-Sized Business Lending in St. Petersburg" and the NPO "Fund for Microfinancing of Small and Medium-Sized Business Entities, Microcredit Company".
The Fund for Assistance to Lending provides guarantees for loans and bank guarantees in the amount of up to 100 million rubles, but not more than 50 percent of the total liabilities. In case of insufficient own security, the Fund acts as a reliable instrument for attracting financing from credit institutions.
"In 2024, the Fund has already processed over 415 requests for guarantees for a total of 6.5 billion rubles, the volume of attracted financing will amount to about 23.9 billion rubles," said Alexandra Pitkänen. "At the same time, since the beginning of the year, manufacturing companies have been provided with guarantees for a total of over 730 million rubles, which allowed manufacturers to attract 1.6 billion rubles for development."
Of the microfinance programs, those that allow attracting up to five million rubles at 1-5 percent per annum are currently in particular demand. "In total, since the beginning of the year, 413 loans have been issued to SMEs and the self-employed in St. Petersburg for a total of over one billion rubles, including 137 loans to representatives of the manufacturing sector for a total of over 371 million rubles (this is 36.5 percent of the total volume of loans issued)," noted Alexandra Pitkänen. "There is an increase in the number of requests for support in the form of a preferential loan from self-employed citizens and enterprises in the manufacturing sector. Special programs for unsecured loans have been developed for the manufacturing sector. Companies operating in the manufacturing sector can attract up to five million rubles to their business at one percent per annum. Over the past period of the current year, over 90 loans without collateral have been issued to SMEs in the manufacturing sector for a total of about 293.7 million rubles. The growth rate compared to the previous year was 28 percent."
The self-employed citizens, and now this is the most dynamically developing segment, are in great demand for the program of unsecured preferential loans, which allows you to attract up to 500 thousand rubles at three percent per annum. In total, since the beginning of 2024, the Microfinance Fund has provided 75 loans to the self-employed of St. Petersburg for a total of over 35.5 million rubles. This is 3.4 times more than the same indicator last year.
It should be noted that both funds are participating in the implementation of the national project "Small and Medium Entrepreneurship" within the framework of the "My Business" infrastructure.
High technology is a priority
Elena Kuznetsova, regional director of the regional programs department of SME Bank, emphasized that companies related to high-tech business, namely those that have received the status of a small high-tech company and are included in the relevant register, can apply for maximum support from the state. They receive financing at three percent per annum to replenish working capital and for investment purposes.
In addition, in 2024, the "1764" program and others, which provide the opportunity to receive a reduced interest rate, were in active demand. "For example, the 1764+PSC program allowed clients to attract funds at a rate of 7.5-9 percent for investment purposes," noted Elena Kuznetsova. "Manufacturing enterprises, companies from the tourism industry and agriculture were able to take advantage of this program."
Among other things, MSP Bank has launched a mechanism to support leasing and factoring companies. "Thus, the bank supports companies that will have the opportunity to provide loans to their clients in the future," explained Elena Kuznetsova.
The prices are biting
The discussion of problems was not complete. One of the most pressing for business remains the growth of cost price. "We manufacture packaging from micro-corrugated cardboard," said Alexander Kudryavtsev, Commercial Director of Multiform LLC. "We have quite a few problems. There is growth, of course. It is due to the fact that the cost of products is increasing. This causes extreme dissatisfaction among our consumers. We work in the b2b segment, that is, our buyers are industrial enterprises. The growth of raw materials in our sector is many times higher than the inflation rates that are announced: 5-7 percent. For us, it is 15, 20, sometimes 50 percent."
The director of the exhibition "Building a House" Alexander Pudikov mentioned the 40 percent increase in the price of finishing materials, which is slowing down individual housing construction (IHC).
"We see a huge growth in individual housing construction," he said. "If we look at the reports for the Russian Federation, we will see that about half of the square meters are built in the individual housing construction segment. In the Leningrad Region, the individual housing construction segment in some areas reaches two-thirds of the total volume of construction. There are positive aspects related to the safety of customers and bank financing. For example, the introduction of escrow accounts, when the customer's funds remain safe until the completion of the construction of a residential building, and banks say that they are ready to issue project financing for builders at one percent - money for the construction of country houses. This is a good tool, but it makes up about 20 percent of the market. This whitens the market a little, but small companies will leave the market, the construction market will be consolidated."