CHARACTERISTICS AND CHALENGES OF BANK LANDING OF SMALL AND MEDIUM BUSINESSES IN RUSSIA

Abstract

The article defines the role of Bank lending in the development of small and medium businesses. These businesses do not require a large amount of upfront investment; they provide a fast turnover of resources and high growth rates. Such kind of business allows innovating and solving important problems related to the unemployment and the restructuring of the economy. Bank loans and financial subsidies from the state have become the most popular sources of financing for these business entities. The article gives the analysis and assessment of the current state of Bank lending of small and medium businesses in Russia. The benefits of lending in this market segment for commercial banks are obvious. It is a highly profitable type of business that gives a possibility of diversifying the credit portfolio. The article reveals the basic problems of Bank lending in small and medium businesses and the reasons of their emergence. The main problems of decreasing demand at the market are the cost of borrowed funds and the need for collateral. The article presents further landing objectives. Banks need to implement approaches providing a combination of techniques appropriate to both corporate and retail customers, for creation a unified system of quick services for small and medium businesses.