Russian small and medium-sized enterprises are experiencing their worst payment crisis since the early months of the pandemic, with a growing number of businesses reporting delays, refusals to pay and mounting financial strain.

According to recent surveys conducted by the state-owned Promsvyazbank in collaboration with several analytical centers, one in four companies said they had encountered cases of non-payment or unethical behavior by business partners over the past six months.

Fifteen percent of respondents reported a rise in such incidents, levels not seen since the peak of the Covid-19 crisis in 2020.

Late payments were by far the most common issue, cited by nearly 80% of affected firms. Another 58% said clients or customers had flatly refused to pay for goods or services already delivered.

“Payment chains are collapsing,” said Alexander Shokhin, president of the Russian Union of Industrialists and Entrepreneurs. “Even large companies are delaying payments. It’s better to hold on to [the money] and just pay the fines, but the interest rate covers everything,” he added, referencing the Central Bank’s benchmark rate of 18%.