How do the countries of the group support the development of SMEs? What challenges do they face, and how do they plan to address them?

Small and medium-sized enterprises (SMEs) in BRICS countries are becoming a driver of economic development. They help create new jobs, foster a competitive environment and even introduce new technologies.

Development plan until 2030

In each of the countries of the group, the development of small and medium-sized businesses is a matter of national importance. Support programmes, simplified taxation, loans and state guarantees, preferential access to public procurement, and services aimed at development and capacity-building are in place everywhere. However, it is clear that these measures, effective at the national level, can generate a synergistic effect if cooperation within the group is strengthened.

In 2025, at the meeting of industry ministers in Brasilia, BRICS countries approved a development plan for small and medium-sized businesses until 2030. The goal is to establish closer cooperation between entrepreneurs from the member states. This could literally open the door for millions of entrepreneurs to participate in global value chains, support innovation and boost exports.

“The action plan is not just a framework document but a truly functioning institutional roadmap, and we already have measurable results for each country that we are proud of,” Lubarto Sartoyo, President of the Alliance of Business Structures and Entrepreneurs of ASEAN Countries, commented on the first results of the SME development plan in an exclusive interview with TV BRICS.

Thus, in Brazil, according to Professor, political scientist and President of the BRICS Business Council (Brazil, Rio de Janeiro) Vicente Barrientos, the approval of the plan has shifted cooperation into a format of permanent working groups.

“Concrete results are already visible within the country,” says Vicente Barrientos. “The ProCred 360 programme provides loans to microenterprises; Desenrola Pequenos Negocios restructures debt with discounts of up to 90 per cent, and the FAMPE fund aims to attract US$5.8 billion over three years,” he stated.

In India, international cooperation under the SME Development Plan until 2030 is also producing tangible results. According to estimates by the Russian-Asian Union of Industrialists and Entrepreneurs, in 2024–2025 almost 340 companies participated in overseas exhibitions, and 5,700 took part in international conferences.

“The programme for first-time exporters (CBFTE) helped 89 microenterprises compensate certification costs, while training at technology centres enhances their global competitiveness,” believes Deputy Chairman and Head of the India Desk of the Russian-Asian Union of Industrialists and Entrepreneurs (RAUIE) Lavlish Taneja.

In Indonesia, the Ministry of Trade recorded 1,217 small and medium-sized enterprises entering the global market under the UMKM BISA Ekspor programme, generating transactions worth US$134.87 million. At the same time, the targeted level of entrepreneurial activity among the population was exceeded, reaching 3.29 per cent.

SMEs in BRICS countries

BRICS countries justify the need to develop small and medium-sized companies for several reasons. SMEs contribute to the development of a competitive environment and increase employment, while small and medium-sized businesses adopt innovations more easily and actively. According to the Financial University under the government of the Russian Federation, in China small businesses generate more than 60 per cent of GDP and act as initiators of new technological solutions.

The SME sector occupies an important place in the Indian economy, providing more than 40 per cent of GDP. The share of SMEs in Brazil’s GDP is about 27 per cent. In Russia it stands at 20 per cent and in the United Arab Emirates at 30 per cent. In South Africa small and medium-sized companies contribute about 35 per cent to GDP and employ more than 54 per cent of the population.

If we generalise these figures, small and medium-sized companies create between 30 and 50 per cent of jobs in BRICS countries. This is a relatively high level that governments intend to maintain and even increase, including through preferential taxation.

“Taxation in Russia and BRICS countries is generally quite low […] I believe that low taxation is the key to sustainable economic development. China and other BRICS countries offer numerous incentives and tax breaks designed to encourage business creation (especially in high-tech, innovative and small businesses), such as low corporate income tax and VAT rates,” emphasised Professor of the Faculty of Economic, Business and Communication Sciences at the European University of Madrid Guillermo Miguel Rocafort Perez in an exclusive interview with TV BRICS.

The Chinese model

Today, small and medium-sized businesses are officially recognised as a driving force of China’s economy. According to various estimates, SMEs account for 50 per cent of tax revenues, 60–70 per cent of GDP, 68 per cent of exports and about 70 per cent of technological innovations. At the same time, the number of SMEs represents more than 95 per cent of all business entities in China. Approximately 80 per cent of the urban working population is employed by small enterprises.

Moreover, small and medium-sized entrepreneurship in China is also an important driver of the resilience of global industry. The country already has more than 600,000 high-tech and innovative SMEs. In addition, the number of so-called “little giants” is growing – advanced enterprises specialising in narrow niche markets, possessing a high market share and powerful innovation potential.

The authorities also intend to continue policies aimed at forming industrial clusters and strengthening the innovation capacity of enterprises. In this way, China demonstrates impressive results in supporting small and medium-sized businesses, turning them into a key element of the economy. Experts consider the PRC an undisputed leader in SME development. China’s success, according to the general view, is based on historically established deep integration into global chains, comprehensive digitalisation and a strong “business–university–export” linkage. However, specialists do not regard this approach as a universal formula for success for all countries.

“The Chinese model cannot and should not be copied mechanically. It is the result of decades of evolution under specific conditions. For BRICS countries, especially those with emerging markets, more – not less – state participation is needed, but in the right form,” said President of the Alliance of Business Structures and Entrepreneurs of Southeast Asian Countries Lubarto Sartoyo in an exclusive interview with TV BRICS.

Strategies for SME development in BRICS

Thus, almost all experts agree that the development of small and medium-sized businesses in the countries of the group is impossible without state support. In addition to domestic programmes and tax holidays, the very fact of partnership between the countries of the group, as well as BRICS initiatives and institutions, contributes to results:

• the New Development Bank, which promotes the development of the economies of member states;
• the BRICS Contingent Reserve Arrangement;
• the BRICS insurance pool supporting mutual trade;
• the agreement on providing credit lines in BRICS national currencies.

At the local level, Brazil has established a special bureau to support SMEs (SEBRAE – Brazilian Micro and Small Business SupportService), which runs programmes assisting small companies engaged in exports. Brazil also provides income tax exemptions for organisations that offer credit guarantees to SME entities.

“In Brazil, small business is the main employer, but not the main investor in technology. We do not have private tech giants capable of financing applied science without state participation. Therefore, at this stage Brazil needs more – not less – state involvement, but not in the form of administration, but rather in the form of grants, guarantees and capital. China passed through this stage 20 years ago,” comments Vicente Barrientos.

A similar view is expressed by specialists regarding India, where 99 per cent of enterprises are microbusinesses. “Here the ‘state as partner’ model is effective: the government not only invests directly (ZED 2.0 programmes) but also creates a ‘digital arena’ (GeM and ONDC platforms), reserving 25 per cent of public procurement for SMEs,” says Deputy Chairman and Head of the India Desk of the Russian-Asian Union of Industrialists and Entrepreneurs (RAUIE) Lavlish Taneja.

Indonesian SMEs also require government support, as they are currently going through a challenging stage, facing import competition and a shortage of technological skills. The state acts as a source of loans through the KUR programme and as an initiator of digitalisation programmes, without which the private sector cannot withstand global competition.

Challenges and prospects

Indonesian entrepreneurs are not the only ones speaking about difficulties. Among the problems of SME development across all BRICS countries, experts most often highlight financing difficulties and limited infrastructure.

“The most persistent constraints are financing, low productivity and managerial capacity, as well as digital inequality. Over the next three to five years, SME policy in BRICS countries is likely to become more conditional and results-orientated. Financing, digital adoption and compliance requirements may increase the risk of a dual scenario: digital SMEs will scale faster, while micro and informal enterprises will lag behind,” noted Erik Escalona Aguilar, Associate Professor at the University of Bernardo O’Higgins in Santiago de Chile, in an interview with TV BRICS.

Nevertheless, despite the possible risks of a gap between digital and traditional SMEs, experts still consider the introduction of digital technologies and AI one of the most effective mechanisms for developing and enhancing the competitiveness of small and medium-sized businesses in BRICS countries.

“Digitalisation improves SME performance mainly by reducing transaction costs (digital payments, electronic invoicing), expanding market reach (e-commerce and platforms) and allocating credit more efficiently based on data assessment,” noted Erik Escalona Aguilar in an interview with TV BRICS. Together with other BRICS partnership initiatives, digitalisation – as well as additional investment – can provide SMEs in the countries with a powerful impetus for development.

“To address the complex situation of SMEs, BRICS countries are strategically working in several areas, such as accelerated technological transformation, where AI plays a key role, deeper integration into regional value chains, and greater reliance on South–South financial cooperation,” emphasised Professor of the Faculty of Economic, Business and Communication Sciences at the European University of Madrid Guillermo Miguel Rocafort Perez in an exclusive interview with TV BRICS.

Within a few years, provided that efforts in these areas are intensified, specialists expect significant results from the SME development plan adopted by BRICS in 2025. This will enable small and medium-sized enterprises in the member countries to participate in the formation of global value chains, introduce innovations and expand exports.

The article was prepared by Svetlana Khristoforova. African Times published this article in partnership with International Media Network TV BRICS