Bank of Russia develops SME lending support package
The road map for the development of financing of small and medium-sized enterprises (SMEs) was presented by the regulator to business associations and financial market participants on 9 October at a meeting of the Bank of Russia’s Working Group for SME funding development.
The aim of the road map is to promote the national project, ‘Small and Medium-sized Enterprises and Support for Individual Entrepreneurship’, and includes boosting the share of small and medium-sized enterprises in the GDP.
The document highlights the key issues impeding the development of SME funding and indicates in broad strokes the directions for improvement and the expected result. Among other things, it is assumed that bank lending development measures will help reduce banks’ operational costs and lead to a growth in SME loans through better stimulating regulation. The road map provides for the development of leasing and factoring instruments and, consequently, for their better availability to the business community. Measures promoting the development of microfinancing, consumer credit cooperatives and investment platforms are aimed at expanding alternative funding sources. The financial inclusion of SMEs (including in the online segment) will be further improved through implementing the so-called ‘digital client’ concept. It will make it possible for certain aspects of interaction between SME clients and the bank to be conducted online, thereby speeding up the service. In order to improve financial inclusion, it is planned to streamline the interaction between banks, credit history bureaus, and tax authorities. Moreover, the document authors believe that increased financial literacy will boost the effectiveness of SME funding.
‘The measures stipulated in this document will help increase the attractiveness of small and medium-sized enterprises for banks and, therefore, lower their funding costs’, First Deputy Governor of the Bank of Russia, Dmitry Tulin is quoted as saying.
The road map is scheduled for implementation in late 2018. The measures are planned for the period up to 2021.