OREANDA-NEWS. March 01, 2011. Entrepreneurs in Latvia who are planning to take loans or lines of credit within the nearest six months most frequently are planning to supplement their current assets, suggests Citadele Index research conducted by Citadele Banka in collaboration with market and public opinion research centre SKDS, reported the press-centre of Citadele Banka.

Such a response was received from 52% respondents. Another 30% pointed out that they are planning to take a loan in order to purchase new equipment necessary for business activity; 25% said they are planning to buy or build real estate; 8% are planning to buy motor vehicles and 8% are going to re-finance or cover their existing liabilities.

Agnese Paegle, Head of Corporate Services Directorate of Citadele Bank informs that “analyzing by industries, up to now companies that operate in energy sector have been the ones who take greatest interest in loans or lines of credit in order to invest in development of manufacturing units or to use the available support mechanisms provided by European Union funds. Large interest from farms and companies who operate in agriculture and milk processing sector as well as companies capable of exporting can be observed. We have come to the conclusion that more than fifty percent of entrepreneurs attract funding from the European Union in their new investment and development projects,” says A. Paegle.

In accordance with the results of the research, presently 25% of companies in Latvia need credit funds – loans or lines of credit – but 71% of respondents pointed out that their companies are not in need of credit funds for the time being. Most frequently, the ones to indicate necessity for credit funds are managers of comparatively large enterprises and agriculture entities. It should also be mentioned that managers of companies with solely foreign capital, have indicated necessity for credit funds in a comparatively rarer number of cases than the managers of companies with solely local or local and foreign capital.

Citadele Index data shows that generally within the nearest half a year, 10% of Latvian companies are planning to take a loan from a bank; the proportion of such companies is comparatively higher among enterprises with a large turnover. Loan sums which might be necessary differ greatly – from 3 thousand to 17 million Lats.

During the last six months, a total of 13% of entrepreneurs have turned to banks in order to borrow money. This proportion is comparatively higher in manufacturing and trade company groups (19% and 20% correspondingly) whereas the proportion is smaller in construction (11%) and services (9%) company groups. A tendency appears that up to now a bigger proportion of companies that have larger amount of employees and turnover have turned to banks: 40% large enterprises, 33% companies with highest turnover rates, only 7% micro enterprises and 3% companies with lowest turnover.

According to data acquired in the research, 45% of companies presently have credit liabilities but 54% - do not. This proportion is comparatively higher in manufacturing and trade company groups (53% and 51% correspondingly) whereas the proportion was smaller in services (42%) and construction (34%) company groups. A total of 28% of entrepreneurs whose companies presently have credit liabilities would be interested in decreasing their monthly loan payments, suspending reimbursement of core sum for a certain period.

Citadele Index is run by Citadele Bank in collaboration with market and public opinion research centre SKDS. This research took place in December 2010 and it involved 750 companies throughout whole Latvia.