Smaller businesses struggle amid lack of credit
As an oligarch-run, post-soviet state, Ukraine’s legal and banking systems remain devoted to serving big businesses, even though smaller ones are the lifeblood of prosperous economies and support most of the people.
Now, in the wake of the Euromaidan Revolution that drove President Viktor Yanukovych from power in 2014, the government says it will do an about-face and make smaller businesses its priority. But they will find the sector is starving for credit. According to the data from State Statistics Office, Ukraine’s small businesses employe 73 percent of the population and acocnt for 61 percent of the gross domestic product. Yet, they remain vulnerable to bureacracy, tax collectors and abuses by monopolies.
“The small and medium enterprises are a layer of people who are fighting for their rights,” Deputy Economy Minister Yulia Klymenko told the Kyiv Post. "By supporting them, we’re supporting our citizens."
To do that, Ukraine has simplified taxes and the process of registering companies, while halving the number of required licenses and permits. But credit remains a problem.
A customer purchases tea at Kyiv’s Tea & Honey shop on May 27. Tatiana Popova, the owner of the small shop, wants to expand her enterprise, but says she can’t afford to take out loans from banks because of the high interest rates. (Serhii Popov)