Dmitry Medvedev: “We plan to create a nationwide system of guarantee institutions with a single coordinating centre – a federal guarantee fund, known as the Loan Guarantee Agency. The guarantees provided by this agency should improve banks’ ability to issue low-risk loans to relatively small businesses.”
Dmitry Medvedev’s opening remarks:
Opening remarks at a meeting on measures to support small and medium-sized business
Today we are holding a meeting on measures to support small and medium-sized business. The Government and other agencies are continuously working on this issue but the situation still leaves much to be desired and we have to return to it again and again.
Much is being done to support and encourage small and medium companies. This work is conducted in different areas. First, the Government takes measures to encourage those who are starting a business, and second, it provides support for companies that are already operating.
Today we have met to discuss measures on making loans more accessible for small and medium-sized companies, and for improving the mechanism for granting state guarantees to them.
Today the share of these companies in the national economy is not so big compared to other countries, although it is growing. For the time being they account for about one fifth of the GDP, and a quarter of all jobs. You know the figures are different in other countries.
Providing incentives for small and medium-sized business is an element of economic policy. Let me recall that in carrying out the National Business Initiative and the adopted road maps we are trying to remove barriers to allow small and medium companies to work freely and efficiently. There has been progress along this path in customs administration, construction and power engineering.
Dmitry Medvedev: "This year new small companies in the production, research, and social sphere will be able to enjoy two-year tax breaks."
This year new small companies in the production, research, and social sphere will be able to enjoy two-year tax breaks. This decision is being actively carried out. I hope that state purchases based on the law of a contractual system will become more open to them.
Loans are a major problem. It is common knowledge that banks are not too enthusiastic about investments in small companies. Their concern is understandable. The majority of small companies have low credit rating because of inadequate collateral and a lack of liquid assets that could be used for collateral enforcement or foreclosure. Current measures on easing access to loans for small and medium companies have not allowed us to make much progress.
There are several proposals that we’ll discuss today, which are controversial. One of them provides an opportunity for long-term loans from the National Wealth Fund. In this case sums will be put into banks with a high long-term credit rating. But this fund is a major resource for us, and the issue of using its money requires very serious analysis. Let’s discuss all the pros and cons of this route.
Dmitry Medvedev: "There is a proposal to establish a national system of guarantee agencies with an integrated coordinating centre: the Federal Guarantee Fund or the Credit Guarantee Agency. It has been proposed to establish it as a non-banking credit organisation."
Today we’ll also discuss a system of guarantees that the state is ready to provide for credit organisations that are investing into small and medium companies.
There is a proposal to establish a national system of guarantee agencies with an integrated coordinating centre: the Federal Guarantee Fund or the Credit Guarantee Agency. It has been proposed to establish it as a non-banking credit organisation.
Dmitry Medvedev: "The agency’s main goal is to provide counter guarantees to operating regional guarantee organisations. Guarantees granted by the agency are designed to enhance the ability of banks to provide loans to relatively small businesses, which should increase total investment into this economic sector."
The agency’s main goal is to provide counter guarantees to operating regional guarantee organisations. Guarantees granted by the agency are designed to enhance the ability of banks to provide loans to relatively small businesses, which should increase total investment into this economic sector.
I’ll mention some figures. According to the Ministry of Economic Development (Mr Ulyukayev will report on them), these figures look fairly good: it is possible to collect almost half a trillion roubles. But let’s wait and see what results will be achieved. At any rate, it is necessary to move in this direction as well. Let’s start our discussion of this issue.
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