Smaller busi­nesses strug­gle amid lack of credit

Kyiv Post Legal Quarterly - - Contents - BY OLENA SAVCHUK [email protected]

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)

Newspapers in English

Newspapers from Ukraine

© PressReader. All rights reserved.