Government support for small businesses in Russia has been cut by another quarter

Despite public statements by Russian authorities regarding the strategic importance of fostering entrepreneurship and announcements of new specialized programs, actual funding for small and medium-sized enterprises (SMEs) is rapidly declining. In the first quarter of this year, the total amount of state support for SMEs amounted to only 52.5 billion rubles, which is 27.5% less compared to the same period last year, when this figure reached 72.3 billion. 

The relevant data was published by the Center for Development of the Higher School of Economics (HSE). The center’s experts also noted that, based on last year’s results, funding for the sector had already fallen by a third.

Analysts’ analysis indicates a simultaneous deterioration in absolutely all key indicators in this area:

• Program coverage: The total number and share of SMEs and self-employed individuals who received at least some form of state aid fell by 6.3% year-over-year.

• Financial assistance: The number of entrepreneurs who managed to secure direct financial support from the government dropped by 17.3% at once.

• Scale of Subsidies: The total amount of funds allocated, as well as the average amount of targeted aid per enterprise, decreased by 13.5%.

Experts attribute this trend to the optimization of budget expenditures and the reallocation of state financial flows toward other priorities for the Kremlin.

After three years of unexpected economic growth, Russia is facing a sudden slowdown—war costs, inflation, and falling oil prices have begun to weigh on an economy that until recently seemed resilient to sanctions.

Consumer lending in Russia has fallen to a six-year low.