Russian SMEs Face Rent Arrears: Study Insights

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About one in five Russian SME owners faced difficulty paying rent in the recent period.

A study by the NAFI analysis center, reported by RBC, shows that roughly 20 percent of private firms across the SME sector struggled to keep up with property rents. The research involved structured interviews with 500 entrepreneurs drawn from all federal districts, offering a nationwide picture of rent-related stress and the ability to cover leasing costs in a tight market.

The survey, conducted in March 2022, found that 20 percent were already behind on payments. Alarmingly, 78 percent reported that they had not received permission for any delayed payments from landlords, signaling tight landlord-tenant dynamics and little tolerance for arrears among property owners. More than half of the respondents anticipated future rent pressure, underscoring persistent uncertainty in the business climate and the financial planning challenges faced by SMEs.

When negotiating lease terms, most owners sought changes in payment schedules. About 62 percent aimed to adjust rental rates, while 14 percent requested landlords to review the overall terms of the lease. However, 21 percent indicated landlords refused to modify terms. A notable portion, 35 percent, had not discussed the topic at all, and 27 percent were actively in talks with landlords about potential changes. These figures reveal a broad spectrum of responses, from proactive renegotiation to hesitation and stalled discussions, as the rental landscape intersects with broader economic pressures on SMEs.

Legal perspectives on non-payment are part of the conversation. In particular, Valeria Leonova notes there are two scenarios where a tenant can be legitimately excused from payments for housing. The first involves circumstances that prevent transfer of funds, such as invalid paycheck timing or disruptions that affect cash flow. For instance, job loss or income interruption caused by a public health emergency can create defensible grounds for deferral in some cases, depending on the contract and local regulations. These nuances underscore the importance of clear lease clauses and timely legal counsel to navigate financial shocks without breaching obligations.

Beyond rent, SMEs weigh broader implications such as the capacity to retain staff, maintain operations, and renegotiate service contracts tied to leased spaces. The ripple effects extend to landlords who must balance revenue needs with the risk of vacancy and the long-term occupancy stability. Transparent dialogue, flexible payment options, and predictable policies that reduce uncertainty can support sustainable small-business growth during economic fluctuations.

Overall, the landscape suggests rent arrears among Russian SMEs reflect a moment of financial tightening rather than a wholesale collapse of rental markets. The willingness of many owners to initiate renegotiation discussions, combined with selective landlord responses and targeted legal considerations, points to a trend toward pragmatic solutions. As conditions evolve, watching how policy shifts, contract norms, and access to credit influence rent payments will be essential for assessing the health and resilience of the small-business sector.

Note: The data reflect a cross-sectional view of SME rental challenges and illuminate general tendencies rather than providing a prescriptive roadmap for every case.

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