Modern problems in lending to small and medium-sized businesses. Small business lending: problems and solutions
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Today there are several problems in lending to small businesses. Firstly, demand is not sufficiently developed - small businesses are often prejudiced about the advisability of lending. The banks themselves are not fully provided with all the necessary resources to work with small and medium-sized businesses. A big problem with a legal framework, often due to complex bureaucratic issues with documentation. Another significant problem in lending to small businesses is the lack of a clear mechanism for supporting businesses at the federal level. For example, the legislative framework confirms the need to support small and medium-sized businesses, but limits specific measures in its implementation.
Since the beginning of 2011, Russia has seen an increase in the volume of business lending by the banking sector. In 2009 - 2010, a lot of enterprises, especially medium and small businesses, went bankrupt precisely because of the sharp decline in credit funds. Now the situation in the lending market is changing for the better: banks are again showing interest in lending to the real sector of the economy, including small and medium-sized businesses. Many banks have already adopted special flexible business lending programs - express loans, overdrafts, and replenishment loans are used to solve current problems working capital. Business development loans are offered to finance long-term projects. The terms of lending to small and medium-sized businesses are often highly flexible. There are special individual schemes repayments taking into account the specifics of the activities of this particular enterprise. Banks demonstrate a breadth of views regarding loan collateral, accepting as collateral not only the property of enterprises, but also goods in circulation, accounts receivable, personal property of business owners, and third parties. As a result, many enterprises are again ready to cooperate with banks and invest loan funds in the development of production. The government and the state are currently providing increasing support for lending to small and medium-sized businesses (hereinafter SMEs). There are funds to promote lending to small businesses in St. Petersburg, Moscow and other Russian cities, thanks to which enterprises that do not have the necessary collateral have the opportunity to receive the required loan amount under the guarantee of the fund. The prospects for SME lending are determined by the dynamics of its development, and given that the number of small and medium-sized enterprises is growing from year to year, it should be concluded that the level of development of SME lending in the territory Russian Federation will not decrease. According to surveys of independent experts, every second small and medium-sized business needs additional financing through lending. Nevertheless, despite all the difficulties, the prospects for the SME lending market are quite positive. Demand is growing, lending volumes are increasing, and banks are creating more and more advanced lending systems, thanks to which the procedure for issuing loans becomes less complicated and more accessible to small and medium-sized businesses.
Concerning current state and the development of small business lending, we can note a certain positive trend: the loan portfolio of small businesses over the past five years has increased more than 3 times, amounting to 3.84 trillion at the beginning of 2012. rubles This is due, on the one hand, to an increase in the number of applications for loans from small businesses. On the other hand, the need of banks to place excess liquidity was expressed in easing loan requirements and lowering rates. The main purposes of lending are to replenish working capital - more than 50% of the total volume of loans issued, for investment goals sent only 16%, 22% accounted for overdrafts. More often, loans are issued for a period of up to 3 years. An analysis of overdue debt of enterprises on loans to small businesses showed that in conditions of financial instability, small businesses showed greater resistance to financial difficulties than large businesses.
The next most important risk factor when working with small and medium-sized businesses is related to raiding by larger structures and officials. The lack of guarantees of private property is a serious factor affecting the pace of development of small and medium-sized businesses in Russia. According to information, thousands of raider seizures of property occur in Russia every year, with the bulk of them being small and medium-sized businesses. And these figures do not include cases of establishing hidden control (protection protection, hidden entry into the capital of an enterprise, purchasing an enterprise at a reduced price, etc.) on the part of government or oligarchic structures. A wide variety of methods can be used. Very often, the formal reason for persecuting businessmen is actual tax violations. Thus, often small and medium business is in a vicious circle: without tax evasion there will be no funds to pay off the “roof”, but tax evasion is the basis for taking away property. lending entrepreneurship market
It is almost impossible to seriously counter this risk; it can only be taken into account. When deploying lending programs for small and medium-sized businesses in a particular region, one should analyze information about the intensity of property redistribution and the degree of involvement of regional government structures in this process. The contractual basis for loans should be prepared in such a way as to minimize the risk of challenging contracts with borrowers by new owners and/or new business managers.
And finally, in conclusion, we will consider the problems of collateral, which seriously constrain the lending process in Russia and is one of the key risk factors when issuing a loan.
One of fundamental problems lending to small and medium-sized businesses is that the lender very rarely manages to obtain reliable collateral. With equity capital from 10 thousand to 1 million rubles. the enterprise simply does not have assets that belong to it not formally, but in essence. That is, an enterprise may have a multi-million dollar balance sheet value, but with such a meager capital, all its assets were actually acquired with funds from creditors and suppliers, therefore, according to “concepts,” these assets should be encumbered in favor of these third parties. Accordingly, the bank, when providing a new loan, actually does not have collateral, since the pledge of assets available at the time of issuing the loan is not economically justified. Of course, there are cases where a small or medium-sized enterprise has industrial or commercial real estate that is reported at an undervaluation corresponding to the small equity capital of the enterprise, but such cases are becoming increasingly rare.
Thus, when lending to small and medium-sized businesses, the collateral, as a rule, is a pledge of production equipment or a pledge of goods. In both cases, one of the main principles of lending is violated - the collateral must be located outside the borrower’s business. In addition, the equipment is low-liquidity, so often it is highly specialized, which sharply narrows the circle of potential buyers. In any case, the costs of dismantling new installation and adjustment sharply reduce the value of such collateral for the lender.
In the case of pledging goods, the liquidity situation is much better. But the problem is that this pledge inevitably takes the form of a pledge of goods in circulation, since “freezing” goods in a warehouse contradicts the goals of lending - expanding the borrower’s business. Therefore, the lender allows the borrower to sell the pledged goods with an obligation, either to repay the loan for the appropriate amount, or to purchase new goods with the proceeds, which are automatically considered pledged to the lender. Naturally, banks have the most problems with this form of collateral. The main one is that at the time of loan default, the warehouse is empty, the goods are sold, and the loan is not repaid. At the same time, despite all the efforts of the bank to collect documents confirming the presence of intent in the actions of the mortgagor, law enforcement agencies refuse to initiate a criminal case for fraud, citing the “civil” nature of the transactions. The borrower, as if he did not want to deceive the bank, simply took on an increased commercial risk by shipping the goods to a consumer who did not pay or used the funds to pay off other obligations of the borrower (here there is a relationship with the risk of “criminal lending”).
At the same time, both the Civil Code and the laws on pledge and mortgage provide the creditor-mortgagee with fairly broad rights. For example, it is legislated that when selling the pledged item, the pledge is retained if the obligation is not repaid, i.e. the pledge holder has the right to demand the seizure of the pledged goods from the new owner if the loan has not been repaid. However, the lack of adequate government institutions and legally established procedures deprives banks of the opportunity to effectively exercise their rights as mortgagees. In particular, in order to exercise the right to demand the pledged property from a bona fide purchaser, the bank needs to find this property itself (there is no need to count on the help of law enforcement officers), file a claim in court, win the case, obtain a writ of execution, and only then with the help of bailiffs (who are also not differ in efficiency) to make seizures. It is clear that this procedure is not feasible, since during this time the property will change owners many times and the bank will have to repeat all the steps listed above.
Absence unified system registration of pledges (except real estate) leads to such a common type of fraud as illegal subsequent pledge. Unscrupulous borrowers taking advantage of the absence unified register collateral and bank secrecy, take out loans in different banks, providing a pledge of the same property as security in violation of the prohibition of subsequent pledges in already concluded agreements without the consent of the current pledgee. In this case, information about an existing encumbrance is hidden from subsequent mortgagees. Thus, each bank expects that it is the only mortgagee. However, in the event of an inevitable default, the secret becomes apparent, and banks begin to sue each other over the rights to the pledged property.
Thus, the collateral current state business does not sufficiently fulfill its function of reducing credit risk; rather, it creates new specific risks for banks. Of course, in theory, there are ways to minimize these new risks. It is possible, for example, to force pledgors to hire security structures affiliated with the bank as warehouse security and oblige them to monitor the execution of pledge agreements. However, many borrowers use the services of centralized (rented) warehouses rather than their own, the security of which cannot be changed. But in any case, such a system is expensive and complicates the lending process.
Bankers assure that they are open to cooperation with small businesses. Entrepreneurs deny this, complaining that it is so difficult for them to get a loan from a bank that it is easier to borrow on the “black” market.
Over the past three to four years, lending to small businesses has grown by 80%. The industry's need for borrowed funds today is satisfied by no more than 15-17%. More optimistic financiers talk about 20 percent market saturation.
Bankers say the main problem in lending to small businesses is the opacity of Russian small businesses. The second problem is the lack of reliable collateral, since the majority of MB representatives do not own liquid property.
The third important factor is the distrust of small businesses experienced by banks. Russian business as such has existed for less than twenty years, and under these conditions it is not always possible to talk about established reputations and credit histories. This problem applies doubly to small businesses - small enterprises, as a rule, are on the market significantly less than large ones, moreover, most of them could not survive the 1998 crisis. Therefore, until recently, Russian market there were very few sustainable, successful small businesses with a credit history.
On the other hand, today not all credit institutions have a normal organization of work with small businesses. The main problems are the underdevelopment of banking technologies, which often do not allow reducing the costs of processing one client, as well as relatively small lending statistics, which makes it difficult to accurately score the risks associated with lending to small businesses. As a result, even if the bank has appropriate programs for small businesses, quite often loans issued under these programs remain unaffordable for entrepreneurs.
The current situation in the lending market is fundamentally different from what it was 8-10 years ago, when the cost of loans for small and medium-sized businesses reached 200% per annum in rubles. If large businesses in Russia can get ruble loans at 12%, then for small businesses real rates start at 16% (10% is offered by the Bank of Moscow, but this is still only a pleasant exception from general rule), but this is also very rare. As a rule, “small” entrepreneurs can count on a loan worth 20-24% per annum, and then only if they have collateral acceptable to the bank or reliable guarantors.
There is very little chance of getting a loan from enterprises that have been operating on the market for less than a year, are not residents, maintain simplified accounting (or do not maintain it at all), and do not have collateral or a guarantor. However, a number of banks sometimes with the support government agencies issue loans without collateral. True, on conditions that can hardly be called attractive: the amounts are small - up to 50 thousand dollars (microloans), the effective rate is quite high (28-30% per annum in rubles), the terms are limited - as a rule, they do not exceed 1.5 years. However, this loan still solves some problems for entrepreneurs. For example, it can be used to eliminate cash gaps when there is not enough money in the cash register to conduct current financial activities.
If we talk about loans for longer periods or for large amounts (for example, 10-15 million rubles for five years), then Russian banks with rare exceptions, collateral lending is used. Moreover, in many cases, the estimated value of the collateral should be twice the loan amount.
But small businesses often do not have property that can be pledged as collateral. And small business itself is poorly developed.
The volume of the “black” loan market is estimated at $6-8 billion per year. Moreover, its pace is comparable to the growth rate of the legal loan market and amounts to about 15-25% per year. And there are real reasons for this.
According to entrepreneurs, sometimes it is much more profitable to borrow from a moneylender at 5-7% per month than to knock on the thresholds of banks, trying to get a legitimate loan, real cost which is two times less than the usurious one. In any case, moneylenders provide loans instantly and without unnecessary questions, and to whom to answer in case of something with their property, the entrepreneur is often indifferent - he does not perceive the credit institution as an ally and expects from it in case of non-repayment of money no less harsh actions than from the moneylender .
The MB, in principle, does not resist its legalization. Moreover, the number of small companies in whose turnover the “white” component significantly exceeds 50% is growing every year. However, the MB needs reciprocal steps from banks and the state. According to the head of the lending department of SDM-Bank, Sergei Kozlov, “the main requirement of small businesses for bank lending is the availability of resources, that is, transparent conditions for granting a loan, reasonable requirements for documents, efficiency in considering a loan application and drawing up contracts.”
Problems of MB lending.
1) From the point of view of banks:
Small business opacity;
Insufficient economic and legal literacy of the majority of Russian small entrepreneurs;
Lack of liquid collateral for small businesses;
Lack of real large-scale government support for small businesses;
High risks of loan non-repayment.
2) From the point of view of entrepreneurs:
High cost of loans;
Too strict conditions for obtaining loans;
Long processing times for applications;
Insufficient governmental support small business;
Inability to get a loan to create a business from scratch.
At the beginning of 2011, small business lending analytics showed rather mixed results. As it turned out, the future of small business lending is directly related to the global economic and financial crisis, which affected both lenders and borrowers. At the beginning of last year, the prospects for the development of small business lending saw the participation of foreign banks, which actively showed interest in the situation with domestic mortgages. The use of foreign experience in lending to small businesses, of course, contributes to the normalization of the economic situation in the country, because the Western economy considers small businesses to be a priority. Therefore, we can conclude that future lending to small businesses is directly related to attracting investment companies from abroad.
It is worth noting that Foreign experience Small business lending allows foreign investors to set interest rates on loans significantly lower than the rates of domestic banks.
The main prospects for lending to small businesses lie in the implementation of government policies that promote and stimulate the development of private entrepreneurship. But foreign experience in lending to small businesses shows that around the world more than 50% of the population is employed in this area, who are taxpayers and make up a huge share of the state budget. All large firms and corporations in Europe, Japan and the USA rely in their activities on the work of small businesses, and therefore the future of small business lending determines their own future, as well as its stability.
Creation favorable conditions For domestic small businesses this is not a matter of one year. As foreign experience shows, the prospects for lending to small businesses are seen in the development of a legal framework that can protect private entrepreneurs and guarantee that business will not be hampered by too high taxes, etc.
The necessary loan for a small business for a fairly long period of time has been issued in the United States for more than 50 years. This is guaranteed by a special support program. In this case, the prospects for lending to small businesses half a century ago were seen in state regulation this issue: a special Small Business Administration was created, which has its own representative offices in each city. This system allows you to easily obtain loans for individual entrepreneurs by investing the money received in the production process.
And at present, in Russia, the prospects for the development of small business lending are aimed at introducing effective foreign methods and creating a flexible mortgage market, which in turn will provide new opportunities in the field of lending.
A noticeable trend recently has been the emergence of interest in small businesses from subsidiary foreign banks. Traditionally, foreign banks have more stringent requirements for risks and procedures, so in the small business lending market they look weaker than the more flexible Russian banks. However, after some time, foreign banks will be able to compete with domestic ones. Low interest rates can help them with this. The experience of developed countries shows that for the emergence and stable development of financial infrastructure for small businesses a necessary condition is an active government policy. According to the UN, over 50% of the world's population is employed in small business. In the USA, Japan, Germany and other countries with developed market economies, small and medium-sized enterprises form a stable, seemingly double structure of “small plus large.” Japanese super-giant firms rely on thousands of family businesses and micro-firms with a high level of operational specialization, responsibility and computer support. The relations of small enterprises with the state and big business are regulated by a legal framework that has been developed over decades. An entrepreneur is interested in foreign experience in lending to small businesses. The American experience seems to be the most revealing. Existing system supporting the development of small and medium-sized businesses in the United States has been operating for more than 50 years. The main coordinating government agency is the Small Business Administration (SBA). SBA has its representative offices in every region and city, ensures the implementation of government policy to support SMEs through various programs(financial support, training, access to resources and government contracts, export promotion, etc.) together with both government agencies and market structures. The SBA conducts various loan programs through commercial banks and other lending institutions, and issues guarantees of 75 to 80% on loans received by SMEs in credit institutions under SBA conditions. There is also a LowDoc loan program: when applying, minimal documents are required, a loan of up to $150 thousand is possible, the applicant fills out an application form (just one sheet) on one side and the lending bank on the back and sends it to the SBA, where within 36 hours ( 3 working days) make a decision (95% positive). In addition to those mentioned, there are many other different special programs. For example, international trade loans (ITL), facilitating the export of goods of small businesses in the amount of up to $750 thousand; credit retraining programs for army veterans, women, rural businessmen; credit programs for saving energy resources, for the environment, the DELTA program - protecting the independence of small firms through financial and technical assistance, diversifying their products on the market, a product certification program, creating new jobs, etc. Thus, American experience shows that key point in the formation of a mechanism for lending to small and medium-sized businesses is the creation by the state of conditions under which financial resources from the most various sources. The German system involves, first of all, not only and not so much direct financing of small businesses through loans and subsidies, but rather the stimulation of microfinance by providing funds to financial institutions working with small businesses. Providing loans within government programs is carried out according to uniform and clear rules for all in accordance with the usual principles of bank lending, i.e. loans are issued only to creditworthy clients, without any preference to individual applicants. Applications for loans are submitted to German commercial banks, which are engaged in issuing loans and further work with clients. Commercial banks enter into a loan refinancing agreement with the state bank KfW, according to which they undertake the obligation to return the funds provided to them. The state bank transfers money to commercial banks, which in turn provide loans to small and medium-sized enterprises. A commercial bank enters into an agreement with an entrepreneur loan agreement, which indicates the purpose of obtaining a loan as specified in the refinancing agreement with a state bank. Payments by the entrepreneur on interest and on the main loan are transferred commercial bank state Commercial banks take responsibility from 50 to 100% for the repayment of loans provided. Commercial banks receive a margin for services related to the sale of preferential loans. Currently, a joint Russian-German project “Harmonization of Russian legislation on lending to small businesses” has been developed. The purpose of the study, conducted by experts of the State Duma Committee on Credit Institutions and Financial Markets together with German specialists from the consulting company OST-EURO, operating under the auspices of the German banking group KfW, is to substantiate the need to change Russian banking legislation, legislation on credit cooperation, and support for small businesses and on the organization of local self-government. This need arises from objective economic prerequisites - in particular, from the need to create an integrated system of lending to small businesses. Suggested by experts A complex approach is to unite all existing financial organizations into a single financial system, in which the first group is formed by microfinance organizations; the second is represented by NGOs various types, and the third is formed by the banks themselves. The basis for the grouping of such institutions is the similarity of the regulatory and supervision regimes on the part of the authorized body (Bank of Russia): the virtual absence of supervision in relation to the first group, strict regulation, supervision and the most complete reporting for the third group and some “intermediate” provision for the second. State support for small businesses can be carried out both through legal framework conditions that provide small businesses with more comfortable functioning, and through the implementation of a set of practical measures directly aimed at solving this problem. According to experts, a turn is coming in the relationship between banks and small businesses. Banks are ready to accommodate borrowers halfway. For example, credit inspectors not only put forward requirements for registering collateral, but also give recommendations on how to do it correctly. Small business itself is gradually changing, its transparency is increasing, which gives reason to assume an improvement in the situation with bank lending to small businesses in Russia.
RISKS OF SMALL BUSINESS LENDING
The potential need for small business loans is estimated at $7 billion - a very promising field of activity for banks, especially small and medium-sized ones. And recently they are increasingly exploring this niche. According to the Rossiya Association, in the regions it is small and medium-sized banks that lend to small businesses, satisfying up to 85% of loan applications. Among the problems hindering the development of this area, two should first be highlighted - the weakness of the resource base and the undeveloped methodology for assessing the risks of lending to small businesses.
The first of them probably cannot be solved without targeted support from the state - both at the federal and regional levels. The potential available here can be judged by the following facts, for example. Last year, the Federal Fund for Support of Small Business distributed only 20 million rubles among enterprises. In the same time total amount loans issued from the fund established by the EBRD at the beginning of this year exceeded 1 billion rubles. Other foreign investors are also active, which is not surprising - interest rates in Russia are several times higher than in the West, and fully compensate for the increased risk of working with Russian borrowers.
The increased interest rate can be brought to the market average (and even lower) by repaying part of the interest from small business support funds.
Today, the Central Bank not only highlighted the practice of lending to small businesses as a priority area of monetary policy, but also prepared specific recommendations for banks - after all, until now, many commercial banks have developed methods of working with “small” borrowers at their own peril and risk. However, an analysis of such methods shows that they have a lot in common, although there are differences.
Banks assess the client’s financial condition on the basis of his official statements, adjusted to take into account actual activities. During the analysis process, the following are determined: the main and auxiliary directions in the client’s business; the history of its development; form and structure of ownership; level of management organization; the company’s dependence on seasonality and degree of specialization, order portfolio and dependence on suppliers; list of main competitors; accounts receivable and payable; level of loan collateral, source of guarantee, etc.
In general, almost all methods are based on the following basic principles of credit relationships between banks and small businesses:
- - do not provide a loan if the company is in a critical situation or the funds are needed to repay another loan;
- - determine the borrower’s creditworthiness only on the basis of an analysis of his real financial situation;
- -take into account the borrower’s competitiveness, reputation, business and professional quality enterprise management;
- - consider the difficulties of providing small businesses with first-class guarantors using combined collateral;
- - promptly resolve the issue of granting a loan and, if the decision is positive, constantly monitor the state of the client’s business and the timing of loan repayment.
Along with general principles, banks also use other approaches that are formed in the process of practical work. For example, some banks recognize only property or guarantees as collateral, others lend only based on turnover, and still others rely on the borrower’s credit history. The problem of forming and recording credit histories comes to the fore today, especially since the share of stably operating small enterprises varies quite significantly by region. Since the borrower is looking for the most acceptable loan terms, there are often several lending banks in his “dossier”. And sometimes the borrower’s information about banks is more complete than the credit institution’s information about potential and actual clients.
In this situation, the bank itself has to create the client’s credit history, starting work with him by issuing small loans for short time and gradually increasing the amount and period. If at the same time a “good” borrower receives benefits in the form of a reduced rate and a reduction in collateral, the small enterprise will be “tied” to its bank.
Already today, the credit departments of some banks analyze the financial condition of the borrower over a long period. What loans did you take before, how did you service and repay the debt, did you have any problems? conflict situations- all this forms the basis of an objective credit history that goes beyond the scope of relations with a single bank.
The repayment of loans by small businesses largely depends on the effectiveness of the use of borrowed funds. The difficulties that small businesses face here depend on various factors: lack of experience, development of new directions, changing market conditions, and others. Our banks are beginning to use foreign experience when the creditor bank actively participates in the development of a client’s business plan and advises its managers on a wide range of financial problems. In the end, it is the lender who is interested in seeing that the funds invested are returned with a profit.
The experience of Belgian banks lending to small businesses is interesting in this regard. There, the participation of specialists is not limited to determining the borrower’s need for financial resources; they advise the enterprise at all stages of using the loan. Moreover, if the debtor has financial problems, the bank gives him recommendations on how to overcome the crisis. And this is not “charity” at all - by helping the borrower, the bank not only guarantees the return of funds, but also retains the client.
As for our country, the methodology for working with small businesses in the banking sector is still just being formed. Thus, a draft instruction of the Bank of Russia “On the procedure for the formation and use of reserves for possible losses on credit claims” has been prepared, the purpose of which is to help commercial banks reduce credit risks based on a more accurate assessment of the financial condition of potential borrowers.
Indicators have been identified as the main criteria when determining the financial condition of the borrower: financial result, liquidity, business activity, traffic information cash flows, characteristic conditions of production activity (industry characteristic, seasonal factor) and others. It is also recommended to create four types of reserves:
- - for possible losses on credit claims;
- - special;
- - for a portfolio of homogeneous credit claims;
- - general - for possible losses.
The type of reserve is determined based on an assessment of credit risk, and its amount is based on the financial condition of the borrower and the quality of debt servicing.
It is typical that when assessing the risk of credit claims, the level of their security is not taken into account. Thus, for many small businesses that operate stably but do not have highly liquid collateral, obtaining a loan will now be much easier. However, “beginners” (including those who can provide security) are unlikely to be satisfied with this approach.
We must not forget that in the small business sector, more than anywhere else, a differentiated approach to assessing creditworthiness is required. If a trading company needs a loan, as a rule, to replenish working capital, then a manufacturing or construction company needs a loan for the development or implementation of a fairly long-term project. There are also diversified small enterprises.
Taking these features into account, the instructions provide for the creation of a special reserve for a portfolio of homogeneous claims (insignificant in volume), the size of which the bank has the right to determine independently - based on a reasoned judgment about the adequacy of the reserve to cover losses.
Bankers assure that they are open to cooperation with small businesses. Entrepreneurs deny this, complaining that it is so difficult for them to get a loan from a bank that it is easier to borrow on the “black” market.
Over the past three to four years, lending to small businesses has grown by 80%. The industry's need for borrowed funds today is satisfied by no more than 15-17%. More optimistic financiers talk about 20 percent market saturation. What hinders its development?
Home small business lending problem bankers call the opacity of Russian small business. The second problem is the lack of reliable collateral, since the majority of MB representatives do not own liquid property.
The third important factor is distrust of small businesses experienced by banks. Russian business as such has existed for less than twenty years, and under these conditions it is not always possible to talk about established reputations and credit histories. This problem applies doubly to small businesses - small enterprises, as a rule, are on the market significantly less than large ones, moreover, most of them could not survive the 1998 crisis. Therefore, until recently, there were very few stable, successful small businesses with a credit history on the Russian market.
On the other hand, today not all credit institutions have a normal organization of work with small businesses. The main problems are the underdevelopment of banking technologies, which often do not allow reducing the costs of processing one client, as well as relatively small lending statistics, which makes it difficult to accurately score the risks associated with lending to small businesses. As a result, even if the bank has appropriate programs for small businesses, quite often loans issued under these programs remain unaffordable for entrepreneurs.
The current situation in the lending market is fundamentally different from what it was 8-10 years ago, when the cost of loans for small and medium-sized businesses reached 200% per annum in rubles. If large businesses in Russia can get ruble loans at 12%, then for small businesses real rates start at 16% (10% is offered by the Bank of Moscow, but this is still only a pleasant exception to the general rule), but this is also very rare. As a rule, “small” entrepreneurs can count on a loan worth 20-24% per annum, and then only if they have collateral or reliable guarantors acceptable to the bank.
Very little chance of getting a loan for enterprises that have been operating on the market for less than a year, are not residents, maintain simplified accounting (or do not maintain it at all), and also do not have collateral or a guarantor. However, a number of banks sometimes, with the support of government agencies, issue loans without collateral. True, on conditions that can hardly be called attractive: the amounts are small - up to 50 thousand dollars (microloans), the effective rate is quite high (28-30% per annum in rubles), the terms are limited - as a rule, they do not exceed 1.5 years. However, this loan still solves some problems for entrepreneurs. For example, it can be used to eliminate cash gaps when there is not enough money in the cash register to conduct current financial activities.
If we talk about loans for longer periods or for large amounts (for example, 10-15 million rubles for five years), then Russian banks, with rare exceptions, use collateral lending. Moreover, in many cases, the estimated value of the collateral should be twice the loan amount.
But small businesses often do not have property that can be pledged as collateral. And small business itself is poorly developed.
The volume of the “black” loan market is estimated at $6-8 billion per year. Moreover, its pace is comparable to the growth rate of the legal loan market and amounts to about 15-25% per year. And there are real reasons for this.
According to entrepreneurs, sometimes it is much more profitable to borrow from a moneylender at 5-7% per month than to beat up banks, trying to get a legitimate loan, the real cost of which is half the usurious one. In any case, moneylenders provide loans instantly and without unnecessary questions, and to whom to answer in case of something with their property, the entrepreneur is often indifferent - he does not perceive the credit institution as an ally and expects from it in case of non-repayment of money no less harsh actions than from the moneylender .
The MB, in principle, does not resist its legalization. Moreover, the number of small companies in whose turnover the “white” component significantly exceeds 50% is growing every year. However, the MB needs reciprocal steps from banks and the state. According to the head of the lending department of SDM-Bank, Sergei Kozlov, “the main requirement of small businesses for bank lending is the availability of resources, that is, transparent conditions for granting a loan, reasonable requirements for documents, efficiency in considering a loan application and drawing up contracts.”
How to reduce the cost of loans for small businesses?
Igor Korolchenko, head of the marketing department of the small business department of Rosbank:
The bank must improve the technology for issuing loans - the technology for considering applications, the technology for servicing. Now many banks offer their loan products on approximately the same terms. Therefore, the level of service begins to play a role here.
Evgeny Elsky, head of the client development department of the Moscow Credit Bank:
Reducing rates is possible if the quality of borrowers improves. Existing rates are primarily due to the high risk of non-repayment of loan funds. Typically positive credit history allows the client to take out a loan on more attractive terms.
Maxim Shindyapkin, Managing Director of the Department of Medium and Small Businesses of the Bank of Moscow:
The procedure for granting loans should be standardized and automated. The reduction in rates is due to increased competition, as a result of which a large number of offers appear on the market. In addition, recently there have been trends towards active inclusion in the lending process. government agencies. Thus, the Bank of Moscow and the Small Business Lending Assistance Fund entered into a cooperation agreement, under which the fund provides guarantees as additional collateral, compensating for the amount of its remuneration and rate.
What's stopping small business lending?
From the banks' point of view
- Small business opacity
- Insufficient economic and legal literacy of the majority of Russian small entrepreneurs
- Small businesses lack liquid collateral
- Lack of real large-scale government support for small businesses
- High risks of non-repayment of loans
From an entrepreneur's point of view
- High cost of loans
- Too strict conditions for obtaining loans
- Long processing times for applications
- Insufficient government support for small businesses
- Inability to get a loan to create a business from scratch
Bibliographic description:
Nesterov A.K. Problems and improvement of small business lending [Electronic resource] // Educational encyclopedia website
Let's consider some issues of improving the small business lending system.
In general, the development of small business lending is complicated from the position of the banking industry by the following objective aspects:
- High level operating expenses when lending – reduces the efficiency of lending in terms of generating income on the loaned capital.
- Limited opportunities application of procedures for minimizing credit risk in relation to small businesses - increases the average level of loan interest on loans to small businesses.
- Increased complexity in managing the loan portfolio, which includes significant number loans for small amounts - contributes to the fact that banks prefer to work with large clients than with small businesses.
From the point of view of the economic content of these aspects small business lending problems boil down to the fact that it is unprofitable for banks to work with small businesses, since the lending procedure is comparable to lending to large borrowers, while lending volumes often correspond to the level of consumer lending, especially in the case of small businesses. As a result, it is more difficult for banks to take into account all possible risks associated with lending to small businesses, which, in fact, occupy an intermediate position between large borrowers and individuals.
At the same time, the long-term strategy of most banks in relation to lending to small businesses is aimed at increasing the availability of borrowed financial resources that entrepreneurs can obtain and reducing the level of loan interest for small businesses. As part of this strategy, banks' policy involves changing the methodology for assessing credit risks and creating reserves for loans to small businesses, similar to European countries. Possible options Implementations of this methodology, depending on the capabilities of a particular bank, may include:
- Accounting complex conditions, characteristic only for small businesses: features of accounting and reporting; benefits for borrowers who have just started their own business, i.e. less than 1 year ago; the possibility of unsecured lending to small businesses.
- Differentiation of loan conditions depending on the scale of activity of small enterprises.
- Setting a personalized loan interest rate for borrowers classified as small businesses, depending on their quality characteristics, profitability indicators, business profitability, business reputation on the local market, etc.
- Implementation of comprehensive measures to simplify the procedure for opening a loan account for small businesses, starting from the moment of opening a current account. However, this option requires changes to legislative norms regarding the registration of small businesses, including the provision of the possibility of remotely opening a bank account and informing the tax service.
- Development of a system of guarantee funds: take into account the guarantees of regional guarantee funds to reduce the reserve for possible losses on loans, remove the limitation on the volume of guarantees, use a single quality rating of guarantee funds. However, this option involves the adoption of large-scale measures at the level of the national economic system, the implementation of which depends not only on a specific bank.
Thus, we can draw an objective conclusion:
is promising direction for Russian commercial banks. Currently, small businesses are going through a difficult and challenging period, so the need to support entrepreneurs, in particular by increasing the availability of borrowed financial resources, is quite significant. In this regard, it seems appropriate to implement effective measures to modernize the small business lending system in order to improve the credit system in modern Russian conditions.
From the point of view of direct implementation at the level of commercial banks, improving small business lending includes three main elements.
Firstly, it is necessary to create a small business lending sector or allocate the position of a credit inspector for small business lending to the staff of the corporate lending department. Depending on the scale of activity of a particular bank and its structural organization, these measures are of an administrative nature and are based on the trend of significant growth in lending to small businesses and individual entrepreneurs since 2012.
Secondly, the possibility of introducing and using research methodology for small businesses in the target region of a particular bank in order to develop personalized interest rates. Personalized interest rates can be used in the segment of lending to small businesses based on their classification by industry and field of activity, on the basis of which the totality of small businesses is assessed for the prospects for the development of the market of their presence. In particular, a three-stage methodology is proposed for establishing personalized rates, as well as reducing credit risk for loans provided to small businesses:
Proposed methodology for establishing personalized rates for small businesses
At the first stage, it is necessary to conduct a differentiated assessment of all types of small business activities in the region in order to identify prospects for their development. In accordance with the results, a conclusion is drawn about the pace of development of specific areas of business activity. The bank's resources should be directed to those areas that demonstrate positive development dynamics.
At the second stage, personalized loan rates are developed and approved at the level of the management bodies of a particular bank in relation to the areas identified at the first stage in which small businesses demonstrate development trends. Thanks to this approach, credit risk is averaged for the entire population of borrowers classified as small businesses that operate in selected segments. Considering that the bank initially includes the risk of non-repayment of the loan in the loan rate, then, in accordance with the proposed approach, overestimation of the loan interest rate for promising borrowers is eliminated due to the fact that more profitable enterprises do not pay the credit risks of less profitable enterprises. Within the framework of this methodology, it is proposed to carry out an analytical ranking of market segments in order to identify those areas in which the number of defaults on loans issued will be close to zero, and those areas of activity where the percentage of defaults is above the average level. Consequently, for small businesses belonging to less profitable areas of activity, it is necessary to increase the loan interest rate to cover possible losses, as well as a more thorough assessment of the creditworthiness of potential borrowers. On the contrary, for small businesses classified as more profitable areas of activity, the loan interest rate should be reduced and the loan issuance procedure should be simplified.
At the third stage, in accordance with this methodology, the bank takes active measures to work with small businesses operating in promising market segments in order to attract them to lending. As a result, a further increase in the volume of lending to small businesses is predicted, and on the basis of revolving loans, after the repayment of the initially issued loans.
Thirdly, an important element in improving the small business lending system is the introduction of special lending programs for small businesses based on the use of cooperative small business lending schemes. Such schemes that are appropriate for implementation at the level of individual banks include joint lending by banks and large small businesses, as well as the unification of a group of small businesses when implementing credit programs.
In the first case, joint lending by banks and large small businesses allows banks to reduce interest rates on loans provided to small businesses, and large enterprises– increase sales volumes of our own products. This scheme involves creating the opportunity to purchase production equipment, commercial equipment, office furniture, etc. on credit. a specific manufacturer who acts as one of the parties in the joint small business lending scheme. A large manufacturing enterprise or seller of equipment pays part of the bank interest on the loan in order to increase sales volumes, and the interest rate directly for small enterprises purchasing equipment from the manufacturer is reduced and is determined only by the loan term and down payment. This cooperative scheme for lending to small businesses is based on mutually beneficial cooperation between large businesses, banks and small businesses: the bank receives new borrowers, the manufacturer or seller of equipment increases sales volumes, compensating for a partial reduction in its income through profit growth, and small businesses receive opportunities for more profitable attraction financial resources.
In the second case, merging a group of small enterprises when implementing credit programs allows the bank to expand the group of borrowers by merging several homogeneous enterprises. In this case, each borrower is credited independently of the others; it is even possible to set different interest rates for enterprises of the same group, depending on the level of credit risk. For example, this approach can be implemented in the form of lending to a group of enterprises belonging to the same vertically integrated production process. An example is the production of confectionery and bakery products: within the framework of this production process, it is possible to combine a group of small enterprises, which includes one or more agricultural enterprises, bakeries and retailers.
Conclusion
The proposed measures to improve small business lending, aimed at ensuring access of small businesses to credit resources, will contribute to the development of small business lending in Russia, which will ultimately lead to the direction of financial resources in promising areas of market activity and increasing their turnover.
