€6 billion is needed to restore Ukrainian small and medium-sized businesses. Research by ASDE
The majority of businesses want to learn how to attract investments (388 respondents), in second place - resumption of activity (61), and in third place - relocation (25).
Entrepreneurs understand that now not only financial, but also organizational support aimed at recovery and development of potential is important.
In the first place, the business faces the question of financing, in the second - restoration, in the third - relocation. The latter did not appear in all enterprises, that is why the request is for financing. After all, there was a loss of vital activity. The majority did not indicate specific amounts, but 50 respondents indicated an amount from €50,000 to €1 million.
However, even before the war, representatives of SMEs were not always able and able to attract investments and various types of financial instruments due to a number of reasons (low formality of business, lack of collateral assets, etc.), now this task has become many times more difficult.
Regarding the details of financial support, the largest number of responses related to receiving grant support:
325 survey participants identified a need for a grant without detailing the amount, and 50 respondents collectively needed €10 million (from a minimum of €2,000 to a maximum of €2 million).
215 respondents indicated a combined answer of grant or investment, and 5 - grant or loan. 126 respondents need only investments, 8 respondents need only loans, and 3 require both loans and investments.
Based on the received data, statistical information on the number of SMEs in Ukraine (the latest data from the State Statistics Service of Ukraine are available for 2020) and assumptions about the amount of financing, we made calculations of the approximate needs of Ukrainian enterprises in the total amount of €6 billion.
The next question asked for details about the shape, size and status of the business. 84 respondents belong to non-profit organizations, 199 to legal entities, 212 to others, in particular, to non-profit organizations, agencies and institutions.
The survey also showed that the majority of enterprises continue to work.
In response to questions about other needs, comments and suggestions, the respondents noted the following ideas:
buyers cannot pay the subscription, there are not enough funds;
problem with working capital in the occupied territories;
the problem of supplying components for electrical purposes, which were previously supplied from abroad;
it is difficult to prove to banks that the currency is bought for production needs;
simplification of customs clearance;
loss of personnel;
search for partners in European and other countries.
At present, the financial support directed to the country is focused on military opposition to the aggressor.
However, investments are of a different nature and must comply with sustainability principles and ESG criteria. After all, each development bank in its portfolio increases its focus on the green economy and strengthens sustainability criteria every year.
Respondents report that it is impossible to take a loan, because banks have suspended lending due to a number of factors, including the increase in the country's riskiness.
However, it is still possible to attract funds for SMEs in energy efficiency projects, in particular within the framework of the Sustainability Recovery Facility project of the Association of Experts on Sustainable Development and Ukrgasbank.
Energy independence from Russia is also an important direction of investment not only in Ukraine, but also in Europe and the USA.
Currently, countries are considering ways to reduce dependence on Russian energy, from accelerating the transition to renewable energy sources, to short-term options for bringing new oil and gas to the market.
Most of the banks have switched to the mode of waiting and preparing for the resumption of funding. Some, on the contrary, switched to active work with clients, for example, Ukrsibbank developed its client support program. Most attention is focused on work with risks, including environmental, social and managerial.
A program of expert support for enterprises has been developed, aimed at consulting businesses on their development based on the principles of sustainability and preparation for international EU standards. The Association of Experts on Sustainable Development is responsible for its implementation.
Permitting specialists to travel abroad to resume stalled projects is relevant. Business needs to restore and create new social and business ties with international partners. Here is a bell to the state that it is necessary to give such an opportunity, obviously for what specified period to leave with return and business trips.
It is also important:
simplification of import operations, unblocking of transport payments;
withdrawal of tax payments due to cessation of activity;
solving the VAT refund problem.
Currently, the holding of specialized exhibitions can serve as a tool, which will help bring the product to the international arena and allow finding partners. Currently, various sites and platforms for mutual assistance and support abroad are actively developing, but the majority of SME respondents are not aware of such tools.
Continue the introduction of electronic document management in all areas.
Interaction between the government, competitors, and consumers is necessary in the circular economy model, according to the respondents.
In addition, Ukrainian enterprises are experiencing a shock, the degree of impact of which is difficult to compare with analogues in the modern history of not only the country, but also Europe. But at the same time, the crisis gives birth to new progress.
In order to resume activities, it is actually necessary to build new enterprises from scratch in the liberated territories.
To a lesser extent, the crisis affected agricultural enterprises and the service sector, and even less — IT companies. But we see that the aggressor here also causes damage: shelling, inability to work, fires, etc., leads to economic losses.
The fact that entrepreneurs do not give up and are actively looking for ways to restore business by proposing specific measures is encouraging. Modern conditions also provide an opportunity to conduct economic activity based on the principles of sustainable development.
To solve the current needs of business, it is possible to some extent to apply the experience of adaptation during the pandemic period, when the state first applied tax holidays and other benefits and quickly reoriented the state program 5-7-9 to the needs of enterprises.
Saturation with various grant programs is able to keep the business afloat, as obtaining loans and investments in these conditions is very problematic. Therefore, it is worth providing expert support and training in order to attract financing, taking into account the goals of sustainable development.
Right now, more than ever, it is necessary to restore the country's economy on the principles of sustainability in all sectors of the economy, because the gap between Ukraine and the EU countries can become an abyss.