The situation for Russian small and medium-sized enterprises (SMEs) is showing a sharp decline: in March, 75% of companies reported having no profit available to invest in their own business. This marks a significant jump from February, when 57% of respondents noted a lack of funds. A monitoring report by the Center for Strategic Research (CSR) also recorded a collapse in the number of enterprises ready to allocate profits to expand production—their share dropped from 29% to just 8.3%.
Key barriers to business growth according to respondents:
- Low demand: cited by 42% of companies.
- High borrowing costs: a barrier for 33% of businesses.
- Rising costs: noted by 14% of entrepreneurs.
In this environment, 17% of companies prefer to place profits in bank deposits rather than invest. Meanwhile, half of all enterprises are forced to hold back price increases to maintain their market share. According to Rosstat, while the share of companies’ own funds in capital investments reached nearly 59% in 2025 (the highest since 1997), overall fixed capital investment fell by 2.3%, with further declines predicted.
Analytical summary: The March data confirms a deep stagnation within the SME sector. The sharp contraction in investment activity indicates that businesses have shifted into “survival mode.” The combination of expensive credit and falling demand strips companies of incentives to grow, forcing them into financial savings (deposits) rather than production expansion. Russia’s model of economic adaptation via small business is hitting a ceiling: without accessible capital and solvent demand, the sector is losing the flexibility required for technological renewal and overall economic modernization.