A new umbrella mechanism will allow businesses in Russia to attract 600 billion rubles by 2024
2021-07-28 11:26

A new umbrella mechanism will allow businesses in Russia to attract 600 billion rubles by 2024

The Federal Corporation for the Development of Small and Medium-Sized Enterprises (SME Corporation) will launch a new "umbrella" guarantee mechanism for small businesses as early as August, which will enable Russian companies to attract bank financing worth around 600 billion roubles by 2024.

"The Board of Directors of SME Corporation, headed by First Deputy Prime Minister Andrei Belousov, has approved the regulations for the new "umbrella" mechanism of sureties, which President Vladimir Putin instructed to develop following SPIEF. The mechanism will enable small and medium-sized businesses to attract 600 billion rubles in bank financing by 2024 and will enable a wide range of entrepreneurs to obtain loans guaranteed by the SME Corporation. This mechanism will become another additional measure of SME support introduced by the Russian government", the SME Corporation said.

The new mechanism is that the commission for the guarantee will be paid by banks, not entrepreneurs. In addition, banks will be able to reduce the rate on business loans, which in 2021 averaged 7.12%. Under the mechanism, the SME Corporation will provide partner banks with surety limits, which will form the portfolios of companies' loans. The surety will provide up to 50%, and for priority areas - up to 85% of the loan amount.

"The new umbrella guarantee instrument will make it possible to cover an even larger number of small and microbusinesses with financial measures of state support, and the emphasis will be placed on investment loans for medium-sized businesses. In fact, the corporation takes the risks, and it will provide an opportunity to obtain credit for those who have been refused a loan by banks. In this case, the mechanism itself will be built into the banking product and the entrepreneur in one place will be able to get both a loan and a guarantee of the Corporation", - said CEO of SME Corporation Alexander Isayevich.

By the end of 2021, surety agreements will be concluded on a pilot basis with at least three partner banks. In 2022, replication of this mechanism will continue.

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Author: Karina Kamalova