The Employment Support Loan Programme has been launched
At a meeting on the implementation of measures to support the economy and social sphere, the government members reported on the implementation of the instructions of the President of Russia. Maxim Reshetnikov, Minister of Economic Development, spoke about additional measures to support small and medium-sized businesses.
As he recalled, on May 16, the Government approved the procedure for implementing a new credit programme aimed at supporting employment:
– All companies can participate in this programme: large, medium, small, and micro, individual entrepreneurs in the affected industries, as well as companies in manufacturing industries that are focused on the consumer market, e. g. manufacturers of furniture, clothing, footwear, and children's toys. All of them will be able to get a loan at a two percent rate. Everything above this rate will be subsidized by banks using the funds from the Federal budget.
The loan amount is determined based on the size of one minimum wage per employee as of June 1. And the maximum term, respectively, is up to six months, plus all necessary mandatory payments.
The company may direct this loan for resuming operations, including refinancing of other loans. First of all, we, of course, understand that the main purpose will be to pay wages. At the same time, the main feature of this programme is the loan write-off.
In other words, if a company keeps at least 90 percent of its employees as of March 1, compared to June 1, the loan will be written-off in full, i.e. nothing will have to be returned to the bank; if the range is between 80 and 90 percent, then half of the loan will be written-off.
Potentially, this programme will cover the businesses with a total of seven million employees, and we expect that at least half of these companies will take advantage of this measure.