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Social and Economic Development of the Republic of Karelia in 2012

  Economic Policy



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Small and Medium Entrepreneurship

In 2012 the Government of the Republic of Karelia continued to work in the sphere of property, financial, informational, and consulting support of small and medium entrepreneurship, co-financing of municipal entrepreneurship development programs, support of export-oriented and innovation enterprises of the republic.

Implementation of the regional program of Development of small and medium business in the Republic of Karelia for the period through 2014 continued. In the year of account such amendments that provide such measures of support as subsidizing of a part of expenses related to payment of interest on loan; partial reimbursement of expenses to small and medium-size business entities providing co-financing of expences on training of specialists within the scope of the State Management Training Plan, expenditures connected with patent and licensing programs, branding, and intellectual property protection.

There has been developed a new measure of the state support of small and medium-size business entities, namely, subsidizing the share of expenses related to purchase of equipment for creation, and (or) development, and (or) modernization of production of goods/works/services.

In the year of account 244,7 million roubles of assignments were allocated for implementation of the program including 186 million roubles from the bederal budget and 58,7 million roubles from the budget of the Republic of Karelia. One of the forms of the state support of SME is functioning of the Guarantee Fund of the Republic of Karelia. Issuance of of guarantees by the Guarantee Fund of the Republic of Karelia (further — Fund) to small business and infrastructural organizations is performed according to credits issued by banks that have concluded cooperation agreements with the Fund. Currently cooperation agreements are in force with 11 banks. In 2012 it had been concluded 81 guarantee agreements amounting to 173,2 million roubles, small and medium-size business entities were issued credits amounting to 465,1 million roubles. In total since the beginning of activity of the Fund (in 2009) total amount of credits issued by banks at participation of the Fund has made 1083,5 million roubles, 225 guarantee agreements amounting to 435,8 million roubles have been concluded.

Due to the SME's growing need of more significant amounts of special-purpose purchase, creation, modernization of the basic means of production credits additional financing of the Fund from regional and federal budgets was performed in 2012 that has enabled the Fund to increase the volume of guarantees per borrowing entity up to 30 million roubles, and the general limit of guarantees — up to 450 million roubles.

By results of research of regional guarantee funds of Russia accomplished by AK&M Rating agency on results of 2011 the objective demand in infrastructural support of SME by guarantee organizations (funds) was observed. The guarantee fund of the Republic of Karelia has won the 21 place in the ranging held among 51 regional guarantee organizations of Russia.

Within the limits of the Program in the the year of account the grant support of the beginning subjects of small business was performed. The uniform commission on consideration of applications about issuance of subsidies and grants has considered 80 applications from SME concerning provision of funds.

On results of selection of investment projects the decision was made to issue grants to 20 competitors, including 18 — to start own business, amounting to 300 thousand roubles, 2 — to establish small innovative companies, amounting to 500 thousand roubles.

One of priority activities of the Program remained issuance of subsidies to budgets of municipal formations for co-financing of municipal programs of SME development including in non-diversified formations. Subsidies amounting to more than 30 million roubles were granted to 13 municipal formations, including 7 municipal formations which structure include non-diversified settlements. The level of co-financing of expenditure budget commitments of municipal formations due to grants from the budget of the Republic of Karelia makes no less than 80 percent.

In order to expand territorial opportunities of realization of products (goods, services), access to foreign markets for SME of the republic support was rendered to export-oriented enterprises. 8 export-oriented enterprises of the republic (Sibirit-3 JSC, Yagoda Karelii (Berry of Karelia) Manufacturing company Ltd., Inpex-Les Ltd., Web-Technologies Ltd., Wood track Ltd., Roskomles Ltd., Vneshtorgles Ltd., Leskarel Voloma Complex Timber Industry Enterprise Inc.) were granted support on partial subsidization of expenses, subsidies were issued to Engineering Centre of Fire Robots Technology FR on partial subsidization of expenses related to payment for services for performance of statutory requirements of the Russian Federation and (or) regulation of the importing country necessary to perform the export of goods (works, services); 3 enterprises were rendered support on on partial subsidization of expenses for participation in foreign exhibition activities.

Implementation of the project of the Business-incubator of the Republic of Karelia creating optimum conditions for starting development of small enterprises through granting complex of services and resources continued. 10 competitions of granting premises and rendering services in the Business Incubator on favourable terms have been held within a year, 16 small and medium business entities have brcome winners of the competition. In 2012 on favourable terms Business-incubator held 35 small business entities with 108 employees, more than 100 various seminars and round table discussions on various aspects of entrepreneurship have been organized and staged.

The regional center for coordination of support to export-oriented small and medium-sized business entities was launched in 2012 on the basis of the Business-incubator of the Republic of Karelia. The center organized business missions of small and medium-sized business entities of the republic to Finland, Norway, Sweden, and Germany. For incentives of small entrepreneurship in 2012 information provided by WEB Portal for the SMEs of the Republic of Karelia was updated, annual regional competitions The Best Entrepreneur of the Year, The best Innovation Project were held, the annual regiona conference Small and Medium Business of the Republic of Karelia: Prospects of Development in the Context of Russia's Accession to WTO was organized and staged.

One of the measures of the state support rendered to SME in territory of the republic by the Government of the Repuiblic of Karelia is property support which concerns privileged privatization and lease. Since 2009 689 decisions were made on conditions of privatization with the priority right of redeem, 644 agreements of sale and purchase of leased property with SME that have expressed consent to use the priority right of redeem were concluded. The list of the state property of the Repuiblic of Karelia free and clear of all liens and encumbrances (except for property rights of small and medium-sized business entities) which includes 17 objects for lease with total area of 12,000 sq.m. (including Business-incubator of the Republic of Karelia) is approved; lists of municipal property for lease by small and medium-sized business entities in 15 municipal formations of the republic which includes 315 objects with total area of 65,000 sq.m. are formed. The moratorium on decision-making on escalation of rentwithin the concluded contracts for the lease of the state property of the Republic of Karelia with SME remains in force. In the year of account performance of activities on assistance to self-employment of unemployed citizens continued. The employment centers have concluded 697 agreements of granting lumpsum financial aid on organization of own business, 130 trips of experts to settlements of the republic with in order to inform the citizens about the opportunity to start entrepreneurship and self-employment have been organized, more than 1000 people have attended these meetings.

In 2012 the state service on assistance to self-employment (consulting, methodical assistance, assistance in drawing up business plans) was requested by 1422 people (3563 people in 2010, 2312 people in 2011), 438 of them were rural residents.

Total cost of assistance to self-employment in 2012 has made 41,7 million roubles.

The range of kinds of activities of entrepreneurs starting their own business varies from motor transportation services, maintenance service and repair of cars to repair and building, and sanitary engineering services; householding, hairdressing, manicure; photography and videorecording; farming; producing national arts and crafts products, rendering of services in the sphere of tourism, trade, etc.

On the basis of data provided in the information analysis report Dynamics of small business development in regions of Russia in 2011 of National Institute for Systemic Studies of Entrepreneurial Problems (NISSEP), the Republic of Karelia has high parameters of entrepreneurial development compared to other regions of Russia. On the rates of growth of investments into the fixed capital and on the most significant gain of the number of small enterprises counting upon 100,000 people the Republic of Karelia is the second best; on the share of the average number of workers of small enterprises in general average employment in 2010-2011 it has the 13th place; on the volume of turn of small enterprises per capita in 2010-2011 in view of the cost of a set of consumer goods and services for inter-regional comparisons it has the 23rd place. As a whole, positive dynamics of all four parameters is observed in 28 regions of Russia, including our republic. On results of the Conducting Business in Russia - 2011 research accomplished by the World Bank, the city of Petrozavodsk has the 11th place on ease of conducting business dealing in Russia.

On preliminary data, the number small and medium-sized business entities (taking into account sole entrepreneurs) in 2012, in comparison with 2011, has grown by more than for 300 units, having reached 27,000 units.

Technical support
Created: August 14, 2013. Last updated: September 17, 2013.
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