Is it small: state-owned companies have reduced purchases from SMEs for the first time in seven years

State-owned companies have reduced purchases from SMEs for the first time in seven years. In January – July 2025, they signed contracts with small businesses for 4.6 trillion rubles, which is 10% less than in 2024, Izvestia found out. Before that, the amounts were only growing. The decrease is due to a record high interest rate — large businesses have increased the cost of paying loans, because 70% of all corporate loans are taken at a floating rate. In addition, the high rate slows down investment activity. Whether the trend will continue and what are the risks for the SME sector can be found in the Izvestia article.

Purchases of state-owned companies from small businesses in 2025

From January to July 2025, the volume of purchases by state-owned companies from small and medium-sized businesses fell to 4.6 trillion rubles, the SME Corporation told Izvestia. For comparison, a year earlier there were almost 10% more of them — over 5 trillion. Prior to that, the amounts had only been growing since at least 2018.

One of the main reasons for the decline in purchases this year is that there is reason to believe that the Russian economy is in recession — if investment growth was 8% in the first quarter of 2025, then 1.5% in the second quarter, said Alexander Kalinin, president of Opora Russia. He added: the fact is that companies have significantly increased their interest burden — 70% of loans are now tied to a rate that remains high.

From October 2024 to June 2025, the Bank of Russia kept the key rate at a record level of 21% per annum. In June, he lowered it to 20%, and at the last meeting in late July, the regulator lowered the figure to 18%.

Debt time: corporations do not pay suppliers from SMEs for 6-9 months.

Who delays payments more often and how they are punished for it

— Now, large enterprises, instead of investing in technology, buying goods and services from small businesses, pay a lot of money to banks every month. With such a financial burden, companies are really buying less," emphasized Alexander Kalinin.

In addition, this trend is associated with an increase in the number of failed purchases, Anastasia Melnikova, senior lecturer at the Department of Entrepreneurship and Logistics at Plekhanov Russian University of Economics, is convinced. According to the Ministry of Finance, in the first quarter of 2025, their number increased by 20% and their cost by 39% compared to the same period in 2024.

Also, Anastasia Melnikova continued, the reduction in the number of bidders may be influenced by too strict conditions or low profitability of the contract for the counterparty.

What are the risks due to a decrease in purchases from SMEs

Problems with reducing purchases from small and medium-sized enterprises are observed not only by state-owned companies, but also by private large businesses, said Vladimir Chernov, analyst at Freedom Finance Global.

— At the same time, large private companies often have more flexible financial capabilities and can adapt faster, redistributing purchases depending on strategic priorities and market conditions. At the same time, state-owned companies are subject to stricter budget constraints and regulatory requirements. This increases their propensity to reduce or reconfigure purchases during periods of economic instability," the expert explained.

According to the SME Corporation, the number of suppliers from small and medium-sized businesses with whom state-owned companies have concluded contracts over these seven months amounted to about 170 thousand. For comparison, last year, 161,000 small enterprises signed contracts during this period. That is, transactions are also "getting smaller".

For about 150 thousand. SME agreements with state-owned companies are a significant source of revenue, says Georgy Martirosov, head of GR Communications at the PRIX Club. This is about 88% of all small businesses that take out such contracts.

Due to the reduction in the volume of transactions, the turnover of small companies is falling, Alexander Kalinin said. The dependence of small and medium-sized businesses on government contracts is high, especially in the industrial, high-tech, scientific, engineering and IT sectors, Georgy Martirosov believes. According to the SME Corporation, manufacturing (almost 1.6 trillion), infrastructure construction (almost 1.4 trillion), scientific, engineering, and professional services (over 250 billion) were among the leaders in procurement this year.

Spot-on answer: government support for SMEs and the self-employed has fallen by almost 40%

What has changed and how will it affect the Russian economy?

State corporations are often key customers for small companies. Reducing the volume of contracts leads to a decrease in revenue, which reduces their solvency and working capital. The loss of a significant share of revenue complicates the fulfillment of financial obligations of SMEs — payroll, rent, taxes and loans. This causes an increase in the number of insolvent enterprises, which leads to bankruptcies, said Georgy Ostapkovich, research director of the HSE Center for Market Research.

The editorial board asked the Ministry of Energy if this could lead to risks for the economy.

Nevertheless, not all SMEs depend on public procurement. According to the tax service, about 6.5 million small business companies are currently operating in Russia, Georgy Martirosov added.

According to Vladimir Chernov, in general, a reduction in procurement may lead to reduced competition, increased dependence on a limited number of large contractors, and loss of flexibility in project execution. For the economy, this means risks of concentration, a decrease in innovation potential and a slowdown in employment growth in the SME sector.

Despite the decrease in volumes, there is still a chance that by the end of 2025, the figures will not be much lower than last year. According to Sergey Katyrin, President of the Russian Chamber of Commerce and Industry, purchases peak in the third and fourth quarters due to investment cycles, raising limits and transferring large lots by the end of the year.