A new institution to support entrepreneurs is expected to be established since July 1, 2015

9th June 2015

Creation of a single institution for the development of small business

The issue of allocating 1 trillion rubles to several major banks for lending to business was discussed on June 4, 2015 in the frames of the XXIV International Banking Congress held in St. Petersburg. According to the Chairman of the State Duma Committee on Economic Policy, Innovation and Entrepreneurship Development, president of the Association of Regional Banks of Russia Anatoly Aksakov, the Commission selected 27 banks – potential recipients of the allocated funds.

 “These funds are necessary to step up lending, which is being scaled down today. If central banks are not active, then the funds can be transferred to regional banks, who are willing to take advantage of these resources for lending to small and medium enterprises”, - said Anatoly Aksakov.

Answering a question about other measures that could foster small business development, the deputy said: “First of all – the creation of a single institution for the development of small business, announced by the President at the meeting of the State Council in April 2015”. It is expected that the organization will unite SME Bank and Credit Guarantee Agency and will receive authority to support small business, which is now the responsibility of the Ministry of Economic Development. However, organizational issues only will not solve the problem, it is necessary to capitalize this institution substantially so that, on the one hand, it could set the rules, and on the other – actively support small and medium business with its resources. Today the problem is not even about taxes for business, but about the inability to obtain money for business development. Banks do not lend to small business due to several reasons, and the main reason is big risks. Unfortunately, the requirements of the Central Bank do not allow lending to companies that are related to big risks. But the newly formed structure will be able to do it because it will include not only SME Bank, but Credit Guarantee Agency as well, and in this case, the risks will be removed.

Anatoly Aksakov also announced the adoption of standards for lending to small and medium business. “This allows securitizing of loans (converting into securities), issued in accordance with these standards. Backed by securities the Bank of Russia refinances loans at 6.5%. In order to make system work from July 1, it is necessary to adopt the amendments to the law on investment promotion and support of innovation in small and medium business, which has already been considered by the State Duma in the first reading. This law is conceptually fits this system. In addition, it is necessary to adopt an Order on the establishment of the Agency for Small Business Development. If the Order and the law will be adopted before the end of the month, the new institution to support entrepreneurs will start working since July 1.”

Source: novostimb.ru

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