The Secret to Success
is Cooperation

Where can you find additional financing for projects that are already underway? This is a question that all entrepreneurs ask themselves. Standard answer to this question: go to a bank or ask your shareholders. But even with banks that are ready to invest in startups, interest rates are far from ideal, and, naturally, far from what every shareholder is willing to invest in new areas.
Is there a solution? For entrepreneurs in the capital, yes there are! They can appeal to the MFSI&E (Moscow Fund for Support of Industry and Entrepreneurship).

Over the past two years this financial institution has been actively working on developing business in the capital. Today, Moscow industrialists can get a loan from this fund for a period of 5 years with a 2% annual interest rate, which on average is 4–5 times lower than the standard interest rate offered by Russian banks to businesses.
Sergey Denisov
General Director, MFSI&E
"From 2017 to 2019, the Fund issued 18 loans to 14 Moscow enterprises amounting to a total of 1.253 billion RUR. Proof of this mutually beneficial cooperation's success lies in the fact that three enterprises – partners of the fund – requested a second loan within that period. The money invested in production development means increased turnover for Moscow companies within the next two to three years, and more tax payments into the city budget. When a new project is launched, new jobs are also created in almost 100% of cases."

Strategic Partner

Support is offered to Moscow's industrial enterprises, Moscow-based exporters and companies wishing to access the international market. The Moscow Government provides a broad range of financial support; Their program is the most comprehensive in Russia. The accomplishments of the Moscow Fund for Support of Industry and Entrepreneurship is excellent proof of it.

The Fund is ready to support new projects at large plants and small high tech production facilities. The largest MFSI&E loan to the amount of 200 million RUR was granted to Faberlic for the purchase of equipment and to replenish their working capital assets. Over the past two years, the Fund has issued five loans of 100 million RUR each, and five loans of 50 million RUR each. These are the amounts most frequently requested by Moscow businesses. Meanwhile the smallest loan issued over was 10 million RUR. Each time, according to the investment plan, financial support provided by MFSI&E covered 70% of all investments that the enterprises needed to dedicate to their projects.

In just over two years of full-scale operation, MFSI&E has already gained well-deserved recognition among its partners. Four out of fourteen companies requested loans twice and received all the necessary funds for their projects.
Dmitry Khankovsky
Operations Director, Faberlic
"With the help of the loan provided by the Moscow Fund for Support of Industry and Entrepreneurship, our company plans to acquire high-speed equipment for our polymer packaging workshop. The high completion rate of this equipment (about 150 pcs/min) will help to improve our products' competitiveness in both terms of quality and in price of the final product."

Production Expansion? Excellent!

A Russian enterprise with almost 100 years of history, Moscow Brake Plant (now MTZ TRANSMASH JSC), received financial support from the Fund in 2018 and 2019. It must be noted that in 2009 and 2014 the enterprise expe­rienced the full effect of the global and industry crises. To retain the necessary number of highly professional specialists, a decision was made to switch to a 4-day workweek.

The plant received a new impetus for development in the summer of 2016, when MTZ TRANSMASH JSC was awarded the status of industrial complex, which allowed it to receive tax breaks for income, real estate and land taxes. One of the advantages of this status is the ability to get a loan with preferential terms, which allowed the company to file a loan application. The first loan was approved in August 2018 for the purpose of spending 100 million RUR on purchasing equipment, and in November of last year the plant received an additional loan of 51.8 million RUR.
Nikolay Egorenkov
General Director MTZ TRANSMASH JSC
"Thanks to the support of the Moscow Government through the MFSI&E, the plant began plans to start manufacturing 17 types of new products as early as 2019. You can judge the production scale by the annual turnover of the enterprise: while in 1998 we manufactured 71,639,000 RUR-worth of products, 20 years later, in 2018 this indicator stood at 5,870,000,000 RUR and, thanks to the support of the fund, in 2019 the turnover of the company amounted to more than 6 billion RUR."
The Moscow Government's support over the past two years has allowed the plant to invest more money into its own development, modernize its equipment and increase production. The plant purchased new machi­nery and is proceeding with a large-scale production of brake equipment products for high-speed ES2G Lastochka electric trains to replace imports.

As of today, the company has completed R&D work on braking systems for the new 81-775 Moskva 2020 metro train. The braking system for the new two-level train car with pneumatic suspension is also being finalised.

The plant has also begun work on designing a braking system for the ES2G Lastochka self-driving electric train, which will be used on the Moscow Central Ring. It will operate at automation level 6 (GOA4 according to IEC 62290).

Real Import Replacement

The fund is ready to provide loans to companies across different industries, regardless of production volumes and the directions of their activities. For example, another unique enterprise that has received financial support twice from the MFSI&E is MicroEM Technologies, a production company from Zelenograd. The enterprise is a contract manufacturer of full-cycle electronics. Structurally, it is part of the MicroEM group, one of the leaders in the Russian development and production market for electronic devices and distribution of electronic components.

At first, the company received 47 million RUR in city support in 2018. This money was spent on purchasing equipment for a new line for electronic component surface assembly, which enabled the creation of a fully-competitive import-replacing production.

This cooperation was so successful, that in late 2019 MicroEM Technologies returned to the capital fund again for another loan to support a new initiative. This time the MFSI&E approved a loan of 10 million RUR, which was spent by the enterprise on modern equipment for cleaning circuit boards.
Georgy Levin
General Director, MicroEM Technologies
"We believe that within two to three years after launching equipment, company turnover will increase by more than 20%, and new jobs will be created. In two years, the company has received almost 60 million RUR in state support. We are very happy with this result. Cooperating with the fund is much more profitable than business credit offered by banks."
Once these two pro­jects are implemented, MicroEM Technologies will be able to expand its product portfolio and attract major Russian clients. The money the company received allowed the enterprise to replace imports of contract-produced electronics for Russian enterprises. Manufacturers of electronic equipment from Zelenograd have been providing competitive conditions to easily and profitably return production from South-East Asia (first and foremost from China) back to Russia.
Corporate Issue, Moscow Department
of Investment and Industrial Policy
E-mail: pressprom@mos.ru
Audience: 16+