IN WHAT AREAS RUSSIANS GO BANKRUPT MOST?

Traditionally, the most common were bankruptcies in the trade and construction sectors, as well as in the real estate market. Over the past decade, they accounted for more than 50% of bankruptcies. However, over the past couple of years, the situation, according to statistics, began to change in the direction of reducing the number of bankruptcies in these areas. It could be assumed that the enterprises have become more risk tolerant, but experts are inclined to believe that the reason for such a change is not stability at all, but legislative changes that complicate the procedural aspect of bankruptcy.

The well-known joke about statistics is very relevant here. As some experts note, the “leadership” of the three areas of the bankruptcy market is associated with the scale of these economic niches, primarily with the number of companies involved in these markets. Moreover, if the calculation is done not by the absolute number, but in the proportion of the number of bankruptcies to the number of companies operating in a particular sector of the economy, it turns out that out of all enterprises, only 2% becomes bankrupt.

According to the fact that in 2019, 58.9% of bankrupt companies fell into three spheres, and in 2018 58.5% of the total number went bankrupt in the same industries, it becomes clear that the trend goes on. However, considering the fact that trading and construction organizations started going bankrupt much less during this period, it is reasonable to assume that the real estate sector took on the main role in keeping the trend.

Fortunately, there are areas of the economy in which business entities are recognized insolvent much less often. Consulting and insurance, tourism and finance, energy and the agricultural sector are more likely to get dry out of the water, not taking the situation to the extreme.

Finally, there are spheres of economy, in which bankruptcy is extremely rare and worthy of entering into a special register of maximum sustainability. This position in Russia is traditionally occupied by the spheres of culture, education, healthcare and sports. Why? The answer is quite obvious. These sectors are characterized by a predominance of legal entities, the legal form of which, as a rule, does not allow the lawful application of bankruptcy. These are most often unitary enterprises or public institutions, financed from the state budget. 

Another reason for a weak optimism is a decrease in the total number of bankruptcies by 5.5% per year. Last year, they were statistically recorded 12.4 thousand. At the same time, the amount of money that managed to be returned to creditors decreased significantly and amounted to only 4.7% of the total debt of 2 trillion rubles. More than a third (37%) of organizations did not have any property at all, through which the debts could be repaid. According to the experts, the main reason for most bankruptcies is the declining demand for products and services of companies, as well as the fact that demand is concentrated in areas of the economy for which there are mainly no market tools for doing business.