DEVELOPMENT OF SMALL AND MEDIUM BUSINESSES UKRAINE IN CONDITIONS OF MILITARY AND ECONOMIC INSTABILITY

Abstract

The article examines the current state and specific features of the development of small and medium-sized enterprises (SMEs) in Ukraine under conditions of military and economic instability. The key role of  the SME sector in ensuring the country’s economic resilience, shaping a competitive environment, creating jobs, and supporting the socio-economic development of regions in crisis conditions is substantiated. The purpose of the study is to analyze the impact of military and economic factors on the functioning of small and medium-sized enterprises. The main challenges faced by SME under martial law are analyzed, including security threats, limited access to financial resources, labor shortages, disruptions in logistics chains, and a decline in effective consumer demand. Based on statistical data, the dynamics of registration and cessation of activities of individual entrepreneurs are characterized, along with the sectoral structure of newly established businesses and regional features of entrepreneurial activity. The study identifies the main problems hindering SME development and determines promising directions for state and international support. One of the key methods of state support for small and medium-sized businesses is financial and credit stimulation. It includes the provision of concessional loans, state guarantees on credit obligations, interest rate compensation programs, as well as grant support for business recovery or start-up initiatives. These measures contribute to maintaining business liquidity and reducing the financial burden under conditions of heightened economic instability. Tax and regulatory instruments also play an important role in the development of small and medium-sized enterprises. These include: – tax incentives; – simplification of tax administration procedures; – deferral of tax liabilities; – deregulation of entrepreneurial activity. An analysis of business activity indicators showed that pessimistic expectations prevailed among SMEs, reflecting a high level of economic uncertainty and risk. At the same time, the continued investment activity of some enterprises aimed at upgrading equipment, digitalisation and staff training indicates a strategic focus on long-term recovery and post-war growth. At the same time, the results of statistical data analysis indicate a high level of adaptability in the business environment. The growth in the number of individual entrepreneurs, especially in the retail, IT, logistics and services sectors, confirms the reorientation of business towards more flexible organizational forms of economic activity.