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“Nornickel is facilitating Norilsk’s and the Murmansk region’s transition to sustainable development. To this end, the company has established a free educational program for current and aspiring entrepreneurs and offers them interest-free loans repayable over several years. Dmitry Bogdanov, Vice-President of the Business School of the Russian Union of Industrialists and Entrepreneurs, and an expert in entrepreneur acceleration programs within the framework of the charitable initiative “A World of New Opportunities”, speaks about small business development in the regions and improving the quality of life.
Dmitry, you have been overseeing Nornickel’s educational projects for several years. Could you please tell us about the updated program?
On December 11, 2022, the company launched a training program for current and aspiring entrepreneurs. Before that, we only had acceleration programs for current entrepreneurs. Such programs aimed to help entrepreneurs test their business ideas, work through challenging aspects of doing business, learn about revenue and profit growth strategies, and get advice on how to grow their customer base.
After a while, though, we started receiving a growing number of requests from people who wanted to start a business, so we decided to design a program that would be of interest to both current and aspiring entrepreneurs. People who want to start a business learn theory, both during face-to-face sessions and remotely. Then elements of the acceleration program are added: each student is assigned to a tracker who helps them develop their business idea. A tracker is an advisor in the acceleration program who helps an entrepreneur test their product hypotheses and strategies to get the business up and running and to improve their financial performance.
On December 11, 2022, the company launched a training program for current and aspiring entrepreneurs. Before that, we only had acceleration programs for current entrepreneurs. Such programs aimed to help entrepreneurs test their business ideas, work through challenging aspects of doing business, learn about revenue and profit growth strategies, and get advice on how to grow their customer base.
After a while, though, we started receiving a growing number of requests from people who wanted to start a business, so we decided to design a program that would be of interest to both current and aspiring entrepreneurs. People who want to start a business learn theory, both during face-to-face sessions and remotely. Then elements of the acceleration program are added: each student is assigned to a tracker who helps them develop their business idea. A tracker is an advisor in the acceleration program who helps an entrepreneur test their product hypotheses and strategies to get the business up and running and to improve their financial performance.
Investment in development
How big is the program?
In terms of the number of applicants, it is the biggest program yet. In Norilsk, we received about 200 applications: 120 participants attended the initial intensive course, and 80 applicants completed the full course. These are record numbers. In the Murmansk region (Monchegorsk, Zapolyarny, Nikel), 98 applications were submitted, with more than 70 people in the Murmansk region successfully completing the program.
In terms of the number of applicants, it is the biggest program yet. In Norilsk, we received about 200 applications: 120 participants attended the initial intensive course, and 80 applicants completed the full course. These are record numbers. In the Murmansk region (Monchegorsk, Zapolyarny, Nikel), 98 applications were submitted, with more than 70 people in the Murmansk region successfully completing the program.
37% of students
completed the full course in Norilsk
We realized that mixing current and aspiring entrepreneurs is a very good idea. While socializing with others, beginners get answers to their questions about potential entrepreneurship risks, overcome fears about starting a business more easily, and get support from experienced entrepreneurs.
And in terms of funding?
These programs offer substantial funding. The funding requirements exceeded 60 mln rubles in Norilsk and 50 mln rubles in the Murmansk region. Ultimately in 2023 48 mln rubles was awarded in Norilsk, and 20 mln rubles was awarded in the Murmansk region. Such an influx of funding requests from business owners who wish to expand their business means that they see a growing demand for their goods and services, and that the local economies are growing at an accelerated pace.
I work at the Russian Union of Industrialists and Entrepreneurs and know what programs other companies have. Norilsk is an obvious leader. There is no other large company that, as part of its CSR programs, would support small businesses with such loans — 48 mln rubles and about 20 mln rubles in the Murmansk region, 1–2 mln rubles per company on average.
We are not talking about grants for NGO projects; Nornickel has that too. Many companies, including metal manufacturers, support small businesses, but there is little money there. Nornickel’s program, on the other hand, is systemic and the largest in Russia in terms of the scope of support it provides.
Have the needs of entrepreneurs changed?
In 2022, entrepreneurs did not want to borrow money, now they do. And these are serious projects, for example, a medical clinic, an aesthetic clinic, children's projects, tourism. In Monchegorsk, the Murmansk region, a woman makes souvenirs and soap with northern herbs, cloudberries, other berries and wild plants. Other people open children's cafes. In Zapolyarny, there is demand for service facilities: eateries, child development centers. Look at entrepreneurs Olga Igolkina and Natalya Skorobogataya from the Pechenga district. Each has more than 20 years of business experience. Olga owns a spare parts outlet, Natalya has a clothing shop. The company offered them interest-free loans to expand their business. Olga is planning to open an auto repair shop, while Natalya is looking to expand the merchandise mix in her shop.
In Norilsk, current entrepreneurs enrolled in the program, too. For example, Rinat Bisaev is going to open a healthcare center. He already owns a network of Invitro diagnostic centers and Uniron pharmacies. Alina Donova, who owns an aesthetic clinic, purchased laser equipment with an 8.5 mln ruble loan, repaid the loan and applied for another one. Lasers can be used for both cosmetic and medical procedures, such as removal of tumors, and skin treatments.
And in terms of funding?
These programs offer substantial funding. The funding requirements exceeded 60 mln rubles in Norilsk and 50 mln rubles in the Murmansk region. Ultimately in 2023 48 mln rubles was awarded in Norilsk, and 20 mln rubles was awarded in the Murmansk region. Such an influx of funding requests from business owners who wish to expand their business means that they see a growing demand for their goods and services, and that the local economies are growing at an accelerated pace.
I work at the Russian Union of Industrialists and Entrepreneurs and know what programs other companies have. Norilsk is an obvious leader. There is no other large company that, as part of its CSR programs, would support small businesses with such loans — 48 mln rubles and about 20 mln rubles in the Murmansk region, 1–2 mln rubles per company on average.
We are not talking about grants for NGO projects; Nornickel has that too. Many companies, including metal manufacturers, support small businesses, but there is little money there. Nornickel’s program, on the other hand, is systemic and the largest in Russia in terms of the scope of support it provides.
Have the needs of entrepreneurs changed?
In 2022, entrepreneurs did not want to borrow money, now they do. And these are serious projects, for example, a medical clinic, an aesthetic clinic, children's projects, tourism. In Monchegorsk, the Murmansk region, a woman makes souvenirs and soap with northern herbs, cloudberries, other berries and wild plants. Other people open children's cafes. In Zapolyarny, there is demand for service facilities: eateries, child development centers. Look at entrepreneurs Olga Igolkina and Natalya Skorobogataya from the Pechenga district. Each has more than 20 years of business experience. Olga owns a spare parts outlet, Natalya has a clothing shop. The company offered them interest-free loans to expand their business. Olga is planning to open an auto repair shop, while Natalya is looking to expand the merchandise mix in her shop.
In Norilsk, current entrepreneurs enrolled in the program, too. For example, Rinat Bisaev is going to open a healthcare center. He already owns a network of Invitro diagnostic centers and Uniron pharmacies. Alina Donova, who owns an aesthetic clinic, purchased laser equipment with an 8.5 mln ruble loan, repaid the loan and applied for another one. Lasers can be used for both cosmetic and medical procedures, such as removal of tumors, and skin treatments.
Big accomplishments of the small business
What criteria must an applicant’s project meet? Should it be linked to Nornickel’s operations?
No, it shouldn’t. These people are not company vendors. Usually, we support local residents who improve quality of life in their areas by developing service businesses allowing people to get what they need without having to travel to large cities. These people are small business owners.
Do you follow your students after graduation?
We keep track of all projects that receive our support. I am pleased to say that we have not seen a single case of non-repayment. There are two entrepreneurs who restructured their loans and deviated a bit from the original schedule, but they are still repaying their loans steadily. The others are making payments on time and often even ahead of schedule.
We do not provide grants, we offer loans. Our goal is to get the business up and running so that even social entrepreneurs who have a high social burden do well financially. Liliya Yakupova from Norilsk is a 100% social entrepreneur. She runs a dance school and took two loans which she has been repaying in a timely fashion, even though her prices are low compared to commercial dance schools. She also has a complex discount system for large families.
Do business owners strive to take their businesses to the federal level or are we talking about small businesses that stay local?
That’s a good question. Of course, every entrepreneur who has done well locally dreams of bigger things. However, the thing about northern regions is that people eventually move to Russia’s central or southern regions after they retire. What I see now is that entrepreneurs do not strive to take their business to the federal level. Instead, they want to expand into the region where they would like to move. For example, one of our students wants to start a business in the Moscow region and has been consulting with me and our experts. The founders of the dance school “Start” established a branch in Krasnoyarsk. Entrepreneurs know that Norilsk is a very good place for them. Yes, the logistics are complicated and costly. Bringing goods and equipment is a challenge. But, on the other hand, competition is low.
Low competition is good, but effective demand is also important. Is there effective demand in Norilsk?
No problem with it at all. We have seen in our programs which have been running for three years that high wages contribute to high demand in the regions where the company operates. None of our students has ever complained about a lack of demand. There may be issues with the product, packaging, communicating product value to customers, fine-tuning business processes. Many entrepreneurs used to make the mistake of buying federal franchises that did not do well locally. Such cases were quite common. But northern entrepreneurs have learned the lesson. No one complained about demand, though.
The company offers competitive pay. If you need proof, look at entrepreneurs who are expanding their businesses instead of downsizing or relocating them to other regions. The demand potential is obvious, and it is supported with money. For example, Talnakh is a remote area but entrepreneurs are eager to open clinics and barbershops there.
No, it shouldn’t. These people are not company vendors. Usually, we support local residents who improve quality of life in their areas by developing service businesses allowing people to get what they need without having to travel to large cities. These people are small business owners.
Do you follow your students after graduation?
We keep track of all projects that receive our support. I am pleased to say that we have not seen a single case of non-repayment. There are two entrepreneurs who restructured their loans and deviated a bit from the original schedule, but they are still repaying their loans steadily. The others are making payments on time and often even ahead of schedule.
We do not provide grants, we offer loans. Our goal is to get the business up and running so that even social entrepreneurs who have a high social burden do well financially. Liliya Yakupova from Norilsk is a 100% social entrepreneur. She runs a dance school and took two loans which she has been repaying in a timely fashion, even though her prices are low compared to commercial dance schools. She also has a complex discount system for large families.
Do business owners strive to take their businesses to the federal level or are we talking about small businesses that stay local?
That’s a good question. Of course, every entrepreneur who has done well locally dreams of bigger things. However, the thing about northern regions is that people eventually move to Russia’s central or southern regions after they retire. What I see now is that entrepreneurs do not strive to take their business to the federal level. Instead, they want to expand into the region where they would like to move. For example, one of our students wants to start a business in the Moscow region and has been consulting with me and our experts. The founders of the dance school “Start” established a branch in Krasnoyarsk. Entrepreneurs know that Norilsk is a very good place for them. Yes, the logistics are complicated and costly. Bringing goods and equipment is a challenge. But, on the other hand, competition is low.
Low competition is good, but effective demand is also important. Is there effective demand in Norilsk?
No problem with it at all. We have seen in our programs which have been running for three years that high wages contribute to high demand in the regions where the company operates. None of our students has ever complained about a lack of demand. There may be issues with the product, packaging, communicating product value to customers, fine-tuning business processes. Many entrepreneurs used to make the mistake of buying federal franchises that did not do well locally. Such cases were quite common. But northern entrepreneurs have learned the lesson. No one complained about demand, though.
The company offers competitive pay. If you need proof, look at entrepreneurs who are expanding their businesses instead of downsizing or relocating them to other regions. The demand potential is obvious, and it is supported with money. For example, Talnakh is a remote area but entrepreneurs are eager to open clinics and barbershops there.
Young people join the ranks of entrepreneurs
Are young people involved in entrepreneurial initiatives? What is the rough age distribution of program participants?
We don’t have exact numbers, but I can take an educated guess. If we define anyone under the age of 35 as youth, roughly 40% of our students fall into this category. If we only take those between the ages of 25 and 30, they account for about 15%. The share of young people has been growing steadily.
This group includes many company employees who start a business while still being employed by the company. Alexander Mishkin, who works at the vehicle unit of Nornickel’s Kola Division, opened the family bathing complex “Parok” in Zapolyarny. Previously, people commuted to Nickel if they wanted to go to the sauna. Oleg Konovalov is a senior power engineer at the Polar Division, he is under 35. He opened the Extreme Kids Center where children learn to roller skate. We see the biggest share of young people in the Pechenga district where there are many 20- to 25-year-olds. Ivan Sorokopudov opened the barbershop “Viking”. Anton Misyura owns a rental business (consoles, scooters); now he is into coffee machine installation.
What other support do you offer?
Interest-free loans offered by the company are not the only source of funding for entrepreneurs. We recommend that they participate in regional programs. In the Murmansk region, there is the 2-mln-ruble governor’s startup, this is a grant that doesn’t need to be repaid. There are 1-mln-ruble subsidies for social entrepreneurs, as well as subsidies for young entrepreneurs. Yulia Mishkina became a social entrepreneur, while Ivan Sorokopudov and Anton Misyura qualified as young entrepreneurs. More than 30% of social entrepreneurs in the Murmansk region are entrepreneurs from the regions where the company operates.
Do you support any ESG-related projects?
Our entire program is in line with Nornickel’s ESG strategy. It meets Sustainable Development Goal 4 — quality education and work. There are both environmental and social projects. The recycling project “Shandy-Pandy” in Norilsk is a good example. Its participants collect clothes from engaged citizens, give some to the poor, and sell some; the money goes to the charity foundation “The 69th Parallel” which uses funding to hold various social events.
In general, all entrepreneurs who participate in our programs have special offers for socially vulnerable groups, and are mindful of the social impact of their projects. For example, Alina Donova provides services to people with medical conditions. In the Pechenga district of Zapolyarny, entrepreneur Yulia Mishkina founded the children's center “Aurora” and opened a children's cafe.
How would you describe the goal of encouraging entrepreneurship in the regions?
The most important thing is that such a strong demand for borrowed funds which need to be repaid shows that the economies of the regions where the company operates are on the rise. The population’s purchasing power and effective demand are growing. Small businesses are creating more and more jobs.
Grant programs are often unsustainable, many projects are closed once they have run out of money. Loan financing, on the other hand, implies sustainability. Here is an example: entrepreneur Alexey Lupka took an interest-free loan from the company, opened the holiday camp “Horizon” and repaid the loan. At the end of the day, the company kept its money and did not have to engage in a non-core business, the holiday camp is thriving, and residents of Norilsk can relax in nature while staying in pretty well-equipped bungalows with a bathhouse. The company lends money, the entrepreneur starts a business and repays the loan; from then on, the business pays for itself and no longer needs ongoing investment from the company — it becomes self-sustaining. This is one of the most important sustainability criteria. Cafes, tourism, healthcare, children's centers, sports facilities — small businesses take it upon themselves to improve the quality of life.
We don’t have exact numbers, but I can take an educated guess. If we define anyone under the age of 35 as youth, roughly 40% of our students fall into this category. If we only take those between the ages of 25 and 30, they account for about 15%. The share of young people has been growing steadily.
This group includes many company employees who start a business while still being employed by the company. Alexander Mishkin, who works at the vehicle unit of Nornickel’s Kola Division, opened the family bathing complex “Parok” in Zapolyarny. Previously, people commuted to Nickel if they wanted to go to the sauna. Oleg Konovalov is a senior power engineer at the Polar Division, he is under 35. He opened the Extreme Kids Center where children learn to roller skate. We see the biggest share of young people in the Pechenga district where there are many 20- to 25-year-olds. Ivan Sorokopudov opened the barbershop “Viking”. Anton Misyura owns a rental business (consoles, scooters); now he is into coffee machine installation.
What other support do you offer?
Interest-free loans offered by the company are not the only source of funding for entrepreneurs. We recommend that they participate in regional programs. In the Murmansk region, there is the 2-mln-ruble governor’s startup, this is a grant that doesn’t need to be repaid. There are 1-mln-ruble subsidies for social entrepreneurs, as well as subsidies for young entrepreneurs. Yulia Mishkina became a social entrepreneur, while Ivan Sorokopudov and Anton Misyura qualified as young entrepreneurs. More than 30% of social entrepreneurs in the Murmansk region are entrepreneurs from the regions where the company operates.
Do you support any ESG-related projects?
Our entire program is in line with Nornickel’s ESG strategy. It meets Sustainable Development Goal 4 — quality education and work. There are both environmental and social projects. The recycling project “Shandy-Pandy” in Norilsk is a good example. Its participants collect clothes from engaged citizens, give some to the poor, and sell some; the money goes to the charity foundation “The 69th Parallel” which uses funding to hold various social events.
In general, all entrepreneurs who participate in our programs have special offers for socially vulnerable groups, and are mindful of the social impact of their projects. For example, Alina Donova provides services to people with medical conditions. In the Pechenga district of Zapolyarny, entrepreneur Yulia Mishkina founded the children's center “Aurora” and opened a children's cafe.
How would you describe the goal of encouraging entrepreneurship in the regions?
The most important thing is that such a strong demand for borrowed funds which need to be repaid shows that the economies of the regions where the company operates are on the rise. The population’s purchasing power and effective demand are growing. Small businesses are creating more and more jobs.
Grant programs are often unsustainable, many projects are closed once they have run out of money. Loan financing, on the other hand, implies sustainability. Here is an example: entrepreneur Alexey Lupka took an interest-free loan from the company, opened the holiday camp “Horizon” and repaid the loan. At the end of the day, the company kept its money and did not have to engage in a non-core business, the holiday camp is thriving, and residents of Norilsk can relax in nature while staying in pretty well-equipped bungalows with a bathhouse. The company lends money, the entrepreneur starts a business and repays the loan; from then on, the business pays for itself and no longer needs ongoing investment from the company — it becomes self-sustaining. This is one of the most important sustainability criteria. Cafes, tourism, healthcare, children's centers, sports facilities — small businesses take it upon themselves to improve the quality of life.
October, 2023
