Tuesday, September 1, 2020

Russian financial loans to solve the Corona crisis

The Russian government said that more than 500 thousand companies can obtain financial support under the recent measures approved by President Vladimir Putin, which included facilities in obtaining loans and direct financial support “free of charge” to finance the monthly wages of company workers. However, some major Russian banks waited to implement their obligations under these measures, and company executives said that they were facing difficulties in obtaining the approved loans at a "zero" interest rate, which prompted the Minister of Economic Development to verify this information himself, and to intervene to remove obstacles, in order to proceed with Implementation of all steps aimed at supporting companies of various levels to face the very complex conditions they face in the circumstances of the spread of "Corona".

The role of the Russian government in the loans provided

Russian Prime Minister Mikhail Mishustin said at the start of the government meeting yesterday, that more than half a million Russian companies can rely on support payments from the state, to face the development of the economic situation caused by the spread of Corona and measures to confront it. He stressed that with the continuation of the pandemic, the government will continue to work to formulate additional support measures, explaining that "the next step will be to work on formulating and adopting support measures for specific sectors of the national economy," and he recalled that President Putin issued instructions to allocate funds to support the air cargo sector. Mishustin asked the ministers "to prepare proposals in the field of construction, civil aviation, and light industries", in order to consider mechanisms to support these areas, and reiterated that the government will continue to work on developing additional support measures.

Russian government assessment of the loan ratio

The Minister of Economic Development Maxim Reshetnikov confirmed this, and said: “Out of 3,500 loan requests worth 24 billion rubles, only banks approved requests worth 1.5 billion rubles, and actually only 400 million rubles were granted loans,” noting that 5 banks are operating Currently, under this plan, he stressed that banks are still reluctant to issue soft loans to small and medium-sized companies, due to internal bureaucracy, and the loss in such loans.

His words aroused the discontent of the Prime Minister, Mishustin, and demanded daily monitoring of this situation, pointing out that Russian banks must grant soft loans with a total value of 150 billion rubles ($ 2 billion), referring to interest-free loans. Intended for the payment of monthly wages for workers in small and medium enterprises.