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In 2024, almost 80% of SMEs plan to expand their business and raise funds for development

Updated: Apr 22

This is evidenced by the results of the 2023 Small Business Sentiment Index survey conducted by the European Business Association as part of the Unlimit Ukraine project with the support of OLX Ukraine and PrivatBank, as well as information support from the Ministry of Digital Transformation of Ukraine, the Entrepreneurship and Export Promotion Office, and Diia Business.


The 2023 wave of the survey shows a slight improvement in SME sentiment, with the integral score of the Index rising to 2.5 points out of 5. This score remains negative but is higher than the 2.4 points in 2022 and 2.2 points in 2020. Among the components of the Index, assessments of the current business state and changes in the next six months showed a point increase.




Among the entrepreneurs we surveyed, 41% assess the state of affairs in their business as satisfactory. At the same time, the number of those dissatisfied with the state of affairs has decreased compared to last year – from 58% in 2022 to the current 40%. However, the share of those satisfied with the state of affairs has also decreased to 19% (24% in 2022). Thus, the overall assessment of the current state of affairs in 2023 is more likely to be neutral.


Over the year, the number of entrepreneurs planning to expand their business increased from 76% to 79%. Of these, 30% plan to open new business lines, and 14% plan to expand their geography and enter other markets. Only 14% of the companies currently export their goods or services abroad. At the same time, 21% plan to expand their team, and 28% plan to increase employee salaries.


The number of entrepreneurs who plan to raise funds to develop their businesses in 2024 has increased to 80%. For comparison, 67% had such plans last year. As before, businesses rely mostly on their resources – personal funds (40%) and, to a lesser extent, on grants (20%), loans (12%), and investments (9%). Intentions to borrow and invest have slightly increased.


Even though intentions to attract credit remain modest, there is a positive trend in assessing credit availability. Among the entrepreneurs we surveyed, the share of those who consider bank lending to be unaffordable has decreased from 59% in 2022 to the current 42%. Accordingly, the share of those who consider it affordable has increased from 10% to 19%.


Oksana Kutsokon, Head of SME Business, PrivatBank JS CB "PrivatBank serves 61% of all entrepreneurs in Ukraine and 45% of legal entities. This is not only a market share, it is also a huge responsibility for providing reliable and uninterrupted banking services, for constant financial support to businesses, and, accordingly, for financing the real sector of the economy. Therefore, the issue of access to credit for business is important to us. Today, almost 200 thousand business clients of PrivatBank have already received calculated offers worth UAH 500 billion for new lending."


We asked entrepreneurs what share of their sales is accounted for by digital channels. It turned out that digital channels are used by the majority of respondents, namely 67%, of which 15% sell exclusively online. At the same time, a third of companies, namely 30%, say that online trading brings them much more profit. At the same time, another 33% of respondents said they do not use digital channels at all.


Igor Syrovatko, Head of Customer Service at OLX in Ukraine and Central Asia "From the survey, we see that many entrepreneurs are not yet using online sales channels. This is about 30%. Although, for some of these entrepreneurs online is not a relevant sales channel at all due to the specifics of the industry they work in, there is still a need and an opportunity to increase the number of entrepreneurs who take full advantage of online sales channels. And to attract entrepreneurs to e-commerce, we need to have a comprehensive approach that includes government support, education, financing, technical assistance, and the development of e-commerce infrastructure. Another way to increase the number of e-commerce entrepreneurs is to increase the number of entrepreneurs in Ukraine. And everyone needs to work on this together. Starting with the government and continuing with businesses that create the infrastructure for entrepreneurs to emerge."


The assessment of expectations of change among SMEs increased slightly in 2023, so the forecasts are more positive than last year. The share of those who predict an improvement (37%) exceeds the share of those who believe that their business will deteriorate (35%). Another 26% do not expect significant changes in the next six months.


The dynamics of changes over the past six months are mostly negative, as more than half, namely 53%, said that the state of affairs in their business has somewhat or significantly worsened. For 28%, the business situation has not changed, and for 19%, the situation has improved.


Traditionally, the lowest of all Index components is the assessment of the economic situation in the country. The majority of respondents assess it negatively, with 34% considering the economic situation unfavorable and 31% catastrophic. It is worth recalling that entrepreneurs’ assessments of the economic situation during the active phase of the coronavirus pandemic were even worse, with 44% of respondents reporting a catastrophic situation. At the same time, in 2023, the number of respondents who consider the economic situation to be favorable increased to 11%, compared to 8% in 2022.


The top negative factors affecting business operations include the low purchasing power of Ukrainians, war and occupation of territories, economic instability, and rising prices and costs.


Anna Derevyanko, Executive Director of the European Business Association "According to the index results, we see a slight but positive trend in the improvement of small business sentiment. Yes, businesses have adapted and are thinking about development. At the same time, additional or new opportunities for support, including financial support, are still urgently needed. After all, as we can see, entrepreneurs rely mainly on their strengths. In addition, dialog and trust-building between business and government are critical because without this, it will be difficult to build a strong economy."


SMALL BUSINESS SENTIMENT INDEX – conducted by the European Business Association since 2017 within the Unlimit Ukraine project. The purpose of the study is to monitor small business assessments and sentiment and analyze growth points that will stimulate its development. The project partners in 2023 are OLX Ukraine and PrivatBank. Information partners are the Ministry of Digital Transformation of Ukraine, the Entrepreneurship and Export Promotion Office, and Diia Business. The survey was conducted from December 1 to 31, 2023. Altogether, 4569 small business owners and directors of all fields of activity joined the survey. 89% of survey participants have revenues of less than UAH 30 million per year.


Unlimit Ukraine is a small business and microbusiness development platform created based on the European Business Association. The project provides comprehensive support for small and micro businesses through educational events and consultations, participation in special projects, diagnostics of business problems, and discussion of issues relevant to it. The participants of the project can be small and micro-businesses with the form of ownership of the individual entrepreneur without limitation of activities. Today, Unlimit Ukraine includes 7500 SMEs.

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