Krasnodar, 22 April. The quarantine has concerned nearly all spheres of the region’s economy, maybe except for the food retail. According to the regional Department for Consumer Sphere and Regulation of Alcohol Market, the turnover in the trade sphere has dropped by 15%, in the HORECA sector by 85%, and in personal services by 100%. The latter was completely shut down, and 9,000 enterprises with 24,000 employees have been standing idle for nearly a month. Of the 56,000 trade objects registered in Krasnodar krai, 27,000 belong to the non-food sphere, so they have also been standing idle. As the quarantine regime would be slackening away, the business would start functioning if not coming back to life. However, small and midsize businesses avoid including the governmental support into their anti-crisis strategy. Will they be able to cope with the crisis by their own?

The press service of the Magyar Collection network announced that the daily gross profit of their restaurants has fallen by 80 to 90%.

Aleksei Zatsepilin, the owner of a chain of coffee houses, confessed that his company had not used any measures of governmental support “because at this stage they are inefficient. There is a risk that six months later, when payments for the credits become due, our income may be even lower than now. For the time being, it’s our team we are anxious about most of all. And I can ensure paying salaries so far.” Mr. Zatsepilin added that despite all measures, the sale proceeds of the four points that continue to work in the new format has dropped by 70%.

According to the Kuban Union of Transport Workers, the breakeven point in their industry equals to 6% of the gross profit, and that breakeven point had been passed during the first week of the quarantine. “We expect serious problems as regards our profits, but so far we can’t see any measures to improve the situation,” Mikhail Mikheyev, Union Chairman, said.

Businessmen would not say that the government do not want to help them. Some alleviations were announced at the very beginning of the quarantine; the lists of the ways of governmental support and of the spheres officially acknowledged as suffering from the pandemic expand every week. However the reality is that not all companies will be able to get the support announced for the industries that suffered from the quarantine. According to the economist Aleksandr Polidi, “not all will be able to survive in this situation. Many will, but not those who did not have a margin of financial safety. The grey schemes will remain without governmental support, because the authorities want to negotiate with those who had for a long while been replenished the budget with tax payments, helped them making the region attractive for investments, etc. The winners will also be those who will be able to adapt fast.”

Pavel Yefremov, Chairman of Board of Neiva Bank, called many federal initiatives “half-measures that cannot justify the entrepreneurs’ expectations.”

“The recommendations for banks have been developed, but neither the banks not the entrepreneurs are interested to fulfil them in long-term perspective,” Mr. Yefremov said. “This is why, every bank is developing its own procedure of working with the clients that experienced hard times due to the coronavirus. For instance, when applying the ‘credit holidays’ which are to be granted for six months according to the federal law, it is necessary to understand that the creditors will also have to pay the credit delay interest. Therefore, the only way-out is individual treatment of all applications. A bank should just sit and draw a new payment schedule that would be more convenient for the client.”


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