In the ministry, it is noted that the current financing model for SMEs has a closed cycle. Financial and credit institutions apply conservative approaches to risk assessment, which is related to the low financial transparency and insufficient collateral of entrepreneurs. In turn, SMEs face difficulties in building quality assets and stable cash flows due to limited access to financing.
Even when assets are available, as stated by the Ministry of Economic Development, their liquidity and quality are often reduced due to location, lack of infrastructure, and issues with title documents. As a result, financial institutions accept such assets as collateral at significant discounts or only as additional security, which substantially limits the amount of available financing.
Moreover, the lending market suffers from a narrow range of products. Most lenders offer standard credit solutions that poorly meet the needs of SMEs, the ministry notes.
The national guarantee mechanism for SMEs will be developed based on a multi-tiered model that includes:
• guarantees of up to 50% of the loan amount – for stable SMEs;
• guarantees of 60-70% – for projects with limited collateral;
• guarantees of 80-90% – for startups, innovative projects, as well as for women and youth engaged in entrepreneurship.
