Defying the Odds: Ukrainian Small and Medium Businesses Grow Amidst The War

Ukraine’s Dual Frontlines

4 September 2023

In September Ukraine officially counted 2,052,326 individual entrepreneurs. Despite the country being embroiled in a full-scale war, the number of small and medium-sized enterprises (SMEs) continues to rise and even surpasses pre-war records.

In June alone, a record-breaking 31,477 new individual entrepreneurs were registered — the highest number in the last three years. On average, around 25,000 new businesses are registered monthly.

Trends in new individual entrepreneur registrations
MonthApril 2022MayJuneJulyAugustSeptemberOctoberNovemberDecemberJanuary 2023FebruaryMarchAprilMayJuneJulyAugust
The number of new fop12,85315,70518,31719,56920,57520,51617,61916,10012,24717,03116,77822,09921,48125,62331,47728,68230,847

However, not all businesses have withstood the economic pressures. Between April 2022 and September 2023, 290,910 individual entrepreneurs ceased their operations. Currently, about 17,000 businesses are shutting down each month.

Unequal Impact Across Regions

The war has had a predictable impact on the number of businesses in various regions. From April 2022 to September 2023, the most significant discrepancy between the opening and closing of new businesses has been observed in the front-line and conflict-affected regions:

  • Donetsk region lost 8,200 entrepreneurs
  • Kharkiv region lost 7,100
  • Kherson region lost 4,500
  • Luhansk region lost 3,700
  • Zaporizhia region lost more than 2,000

Glimmers of Hope

In contrast, some regions have seen more businesses opening than closing. The most substantial growth was observed in Kyiv, with a net gain of 12,900 new entrepreneurs, followed by Lviv region, where there was an increase of 12,300 businesses. Dnipropetrovsk region rounds out the top three with a net increase of 8,600 individual entrepreneurs.

This uptick in entrepreneurial activities, even amid a devastating conflict, highlights the resilience and adaptability of Ukraine’s business sector. While challenges undoubtedly remain, especially in conflict-affected regions, the overall growth in the number of SMEs brings a glimmer of hope to an otherwise bleak economic landscape.

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