TRILLION FOR SMALL BUSINESS

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The Ministry of Economics of Russia recently updated the programme of discounted loans.

The Ministry relaunched the programme of discounted (preferential) loans for small businesses, this time within the framework of a National project. The state offers loans to entrepreneurs at a rate of up to 8.5% pa instead of the previously available 9.6%–10.6% pa.

It is assumed that this year the banks will issue 1 trillion Roubles worth of loans for small business, and in a longer run, up until 2024, 10 trillion Roubles worth. The latest report by the CBR on lending notes that cash for small businesses is still more costly than what is on offer for the large companies by 1.3%–2.5%.

As part of the National project for the small business development, the Russian Ministry of Economy is launching a programme of preferential loans approved last December and conceived to run up until 2024. The interest rates will range between 7.75% and 8.5%. The previous programme of preferential loans was in place since 2015 under a label 'Programme 6.5' and had interest rates ranging from 9.6% to 10.6% pa.

Now, the state once more engages in subsidising part of the interest rate, namely 1.5%–2.5% for the authorised, systemically important banks and 1.75%–2.75% for other credit institutions. The highest loan amount for a borrower during the fiscal year would be 1 billion Roubles directed for investment and 100 million Roubles for replenishment of the working capital. The longest term of an investment loan is 10 years, and up to 3 years for a working capital loan.