Prime Minister Vladimir Putin this week told banks that receive state aid to lend at no more than 3% above the central bank's refinance rate, but the measure is unlikely to benefit small- and mid-sized businesses.

After months of complaints from Russian borrowers that they have no access to reasonably priced loans, the Government stepped in. Prime Minister Putin this week said banks that get state aid should lend at no more than 16 percent.

“The amount of lending to the real sector and individuals must equal the amount of financial support that the bank got from the Government. And the interest rate must not be more than the Central Banks refinancing rate plus 3%. This means that the final credit rate to a borrower must be 16% including all the commission charges.”

The new measures don’t actually mean the state will control interest rates. Andrey Kostin, President of Russia's second biggest lender, VTB, said banks will decide to whom they lend and at what rate, reserving the lowest rates for the most reliable borrowers.

“This concerns only the funds provided by the state, and this money should be lent at cheaper rates. Overall, however, interest rates will vary depending on the risks associated with each borrower. Higher risk borrowers will get rates of 20-22%. Nobody is setting a ceiling for us.”

Analysts, including Ekaterina Trofimova, Bank Rating Director at ratings Agency, Standard & Poors, say this means that cash-strapped small and mid-sized business – the backbone of most Western economies – will have no access to cheap financing.

“To tell the truth, I would hardly see banks really running to lend to SME’s, to even mid sized businesses, money with 300 basis points of the Net Interest Margin.”

Putin also pledged to inject an extra $14 billion dollars to the banking sector. That brings the total support of Russia's banks to $36 billion dollars so far.