In August, the SME status index in the Russian Federation fell to a year-low of 54.7

The monthly index is calculated by the state-owned Opora Rossii organization, Promsvyazbank and the Magram Market Research agency, analyzing four key indicators: sales, investments, staff and availability of financing.

According to Kommersant, which reviewed the analytical documents, in August the index fell to 54.7 points (in July it was 55.8, in June – 57.6, in May – 58.1).

Representatives of small and medium-sized businesses interviewed (at least 1.8 thousand people from different regions of the country) noted a drop in sales and pessimistic sentiment due to the “strict monetary policy of the Central Bank.”

Against the backdrop of rising interest rates and the reduction of government support programs, entrepreneurs are in no hurry to use borrowed funds to develop their businesses (demand for financing by SMEs through a loan has decreased for the third consecutive month).

In the last summer month, just over a third of companies (35%) expressed “interest in borrowing”. Another almost a third of respondents (28%) are not willing to apply for loans, which is a record figure for the entire observation period.

Only 20% of companies reported revenue growth, 31% reported a decline in sales, while 31% of entrepreneurs were hopeful of an improvement in the situation (particularly sales growth) (in July there was an increase of 2 percentage points). The number of those who expect an even greater drop in sales (22%) is growing faster (+5 percentage points) than the number of those who expect a decline.

There is also a problem with staff: all companies notice a “hunger” in the personnel market, while the salary expectations of applicants are increasing, which leads to higher costs for small and medium-sized companies.

Falling sales, lack of equity, lack of staff and decreased availability of credit are the main reasons why SMEs no longer show a positive attitude and prefer to wait and not invest in the business.

In August, only 20% of respondents increased investments, which is the lowest since November 2023; another 11% have reduced investments and 7% plan to do so (a record since 2023). In the overall context, a minimum of entrepreneurs are thinking about expanding their business (starting in December 2023) – only 24%.