STEPAN SEMTSOV: SMALL AND MID-SIZED BUSINESSES ARE ON THE BRINK OF BANKRUPTCY

Stepan Zemtsov, Senior Researcher of the Innovation Economy Department, Gaidar Institute told the Nezavisimaya Gazeta daily that the reduction of revenues of the business amid the coronavirus pandemic affected badly the small and mid-sized business sector.

As seen from the nationwide survey of managers of small and mid-sized businesses, amid the breakup of economic ties small and mid-sized businesses face a wave of bankruptcies. Enterprises encounter non-payments for delivered goods and rendered services. One enterprise in four fails to meet its liabilities to creditors. A half of small companies cannot pay wages to their workers because of lack of funds. In addition, small and mid-sized businesses have reported that they are unable to pay public utility fees and meet their obligations to banks.

“Households have cut considerably their spendings on everything, except for food. Housing and public utility services are paid with a delay. In some industries, the customer flow and the volume of sales fell by 90% in April, while the liabilities as regards rental payments and payments to counterparties for the earlier shipped products remained the same. Some large state-owned companies and public sector entities delayed payments even on fulfilled contracts because of the red tape and infeasibility to sign relevant documents”, Stepan Zemtsov sums up