Tatarstan observes the “process of flow” of entrepreneurs to self-employed

Loans to self-employed of up to half a million

From December 1, Tatarstan started issuing loans to the self-employed — those who have been in this status for at least six months. Professional income tax payers can apply for a micro-loan of up to 500,000 rubles at a rate of 6% per annum for a period of 3 to 24 months. This and other new support measures were discussed in the Tatarstan Entrepreneurship Support Foundation (under the ministry of economy of the Republic of Tatarstan).

Before this, the largest campaign of the foundation was the issuance of another microfinance product called Odnoprotsentny (One Percent) — from April 23 to September 30, 2020. Those SMEs that lost more than 30% of their revenue due to the pandemic and restrictions due to Covid-19 received loans, explained Aydar Salikhov, the director general of the foundation.

In total, 253 such microloans have been issued in the amount of 293 million rubles. Currently, the foundation is extending these loans for 1,5 years, but only to those entrepreneurs who could retain up to 90% of their employees relative to March 2020 (the rate will remain the same — 1%).

Hundreds of entrepreneurs enter foreign markets

Other support measures include product certification services for up to 300,000 rubles and product promotion services for up to 100,000 rubles on marketplaces like Ozon and Wildberries. Second, subsidising the interest rate for managing companies of industrial parks and their residents — on loans up to 5 million rubles from January 1, 2020 to November 30, 2020; and the micro-loan 'Construction' to them of up to 30 million rubles at 5% per annum for up to five years. The foundation plans to issue another 200 million rubles by the end of December.

An additional package of support for SMEs, implemented from August 2020, was aimed at export-oriented enterprises — they were offered a microfinance product 'Development' in the amount of up to 5 million rubles at half the key rate of the Central Bank for 2 years to those entrepreneurs who had an export contract at that time. Also, among the support measures — subsidising the interest rate on loans up to 5 million rubles. In addition to financial assistance, according to Salikhov, My Business centre provided consulting support, in particular, on placing of local Tatarstan enterprises on foreign markets and/or electronic trading platforms.

As a result, 97 entrepreneurs entered online marketplaces (in 2019, there were only 18 of them), and 56 — foreign markets. According to the foundation, 97 entrepreneurs were placed with the help of the centre on eight international platforms, in particular Alibaba and Amazon (they especially noted the activity of the German platform of the latter Amazon.de), Ebay. Salikhov explained the activity on foreign and Russian marketplaces as a forced decrease in the number of foreign and Russian exhibitions during the pandemic. According to him, marketplaces provided a certain way out of a difficult situation for a number of companies.

Support to business students “has not taken off”

Out of the all listed support measures, as it turned out, the measure for student entrepreneurs (included in the register of small and medium-sized businesses) “did not take off”. Salikhov just spread his arms — why, it is unclear. Only one student from Aktanysh received such support (the Start programme could issue a loan of up to 500 million rubles at the Central Bank's key rate for up to two years). The rest, “apparently, are still thinking”, suggested the director of the Business Support Foundation.

The volume of easy loans of 1,3 billion

In total, the head of the Entrepreneurship Support Foundation of the Republic of Tatarstan said that loans worth 1,3 billion rubles were issued in 2020. By the beginning of December, 574 preferential loans had already been issued (last year, there were significantly fewer of them — 398) to entrepreneurs for a total amount of 998 million rubles. Salikhov expressed confidence that, given the current pace, the amount will definitely exceed 1 billion rubles by the end of the year.

Second, the Guarantee Fund of the Republic of Tatarstan issued guarantees in the amount of 1,5 billion rubles in 2020. Third, as part of the loan financing, 300 entrepreneurs received support for a total of another 7 billion rubles.

Tatarstan issued another 28 million rubles to catering enterprises (154 entrepreneurs in total) to subsidise the cost of services for the delivery of ready meals. Let us remind that Yandex.Food and Delivery services ask for a certain fee for such services — this is the fee that the authorities of the Republic of Tatarstan subsidized to those restaurants and cafes that were forced to reorient to delivery under restrictions.

“There is no sharp decline in the number of entrepreneurs”

Aydar Salikhov, commenting on the results of support for the self-employed and entrepreneurs in the difficult 2020, noted that the authorities of Tatarstan are seeing an increase in the number of self-employed and suggested that, probably, “there is a process of flow”: entrepreneurs are becoming self-employed.

“Since there is still no sharp decline in the number of entrepreneurs in Tatarstan," he said confidently. “After all, the federal structures and Tatarstan have made every effort to prevent this from happening!”

According to him, the foundation's assistance this year mostly concerned not entrepreneurs who would like to direct preferential loans for investment projects, since the amount of such assistance, which does not exceed 5 million rubles in the republic, is still insufficient for investment projects, “larger amounts are needed there”. Mostly, entrepreneurs took out loans to replenish working capital, he noted:

“We do not limit the goals — we only do not issue loans to enterprises with excisable activities. Someone spent on salaries, someone — on the purchase of raw materials, someone — on fuel and lubricants. In general, each support measure is good for a specific entrepreneur. Someone needs ad campaign, for example. We have recently visited a fish factory in the Rybno-Slobodsky district, and the female owner was delighted that we had developed a website for her! Certification helps someone a lot: yesterday another businesswoman who produces creams using mink oil came to me — thanks to the help with product certification, her company could open again. Microloans at a one-percent rate helped some of them — so that at least to keep the staff.

“If there are requests from self-employed people over 65, we will change the product!”

The director general of the Tatarstan Entrepreneurship Support Fund also commented on a strange reservation on measures to support the self-employed — it is limited to the age limit of 65 years (in the West, such discrimination against older people would be called “ageism”). According to Salikhov, self-employed people appeared in Tatarstan only last year, and Tatarstan was a pilot region, where more than 60,000 entrepreneurs have been registered in this status to date. And after studying the issue with his team, the head of the foundation shared an observation: the age of the self-employed is 25-45 years. There were still no applications for assistance from the older self-employed, he said.

“So far the framework is such.... We have launched our project [from December 1 — micro-loans for the self-employed in the amount of up to 500,000 rubles at a rate of 6% per annum for a period of 3 to 24 months], we will see, try this group, if there are requests from the self-employed over 65 — we will change the product! We also look at the possibility of microloan repayment — this is a returnable support system: the body of the loan is repaid, and we give it to another self-employed person," he explained.