OREANDA-NEWS. September 02, 2011. In July Citadele Bank has undersigned loan agreements worth 3.2 million Euros from the funding offered by European Investment Bank (EIB) for supporting small and medium businesses in Latvia, reported the press-centre of Citadele Bank.

Agriculture, aquaculture and manufacturing enterprises are the first ones to receive loans from the EIB funding in accordance with the concluded agreements. Loan funds will be invested in projects that are aimed at expanding manufacturing units and developing new products.

“The fact that we have concluded agreements for 3.2 million Euros already during the low season – summertime – is a good indicator. These loan funds from the EIB will be granted for implementation of investment projects and expansion of manufacturing. At the beginning of this year the most demanded type of funding in Latvia was the one anticipated for increasing current assets and maintaining manufacturing whereas now we see that companies gradually recover and they are not as cautious in implementing their investment plans. They start implementing the projects that were developed and elaborated before the crisis,” says Agnese Paegle, Head of Corporate Banking Sector of Citadele Bank.

She points out that the activity of companies in Latvia increases mainly due to the availability of funding from the EU and State support programs.

As announced previously, in July Citadele Bank started issuing EIB funding for development of small, medium and micro enterprises. Citadele is ready to invest over 100 million Euros or 70.3 million Lats in Latvia’s entrepreneurship during a year.

EIB funding is available for the support of companies that operate in manufacturing, agriculture and services industries. This enables entrepreneurs to receive loan funds at a fixed long-term interest rate. This type of funding can also be combined with support instruments offered by the EU or the State.

“Citadele’s aim is to facilitate activation of the local market in Latvia’s business sector, paying special attention to small, medium and micro enterprises which presently are in greatest need of support. Small and medium enterprises make up over 99% of all of the economically active companies in Latvia. Growth of small, medium and micro enterprises is an important precondition for shaping a stable middle class and decreasing unemployment in Latvia”, comments Juris Jakobsons, Chairman of Citadele Bank.

“EIB funding with the anticipated flat rate enables companies to plan and fix their monthly expenses because these loan funds do not depend on changes of LIBOR. Besides, economists anticipate a gradual increase in LIBOR during the next couple of years”, explains Agnese Paegle.

“EIB funding can assist small and medium companies in their current needs – increasing current assets, purchasing raw materials, goods, equipment and instruments, modernizing manufacturing units and increasing efficiency as well as developing new areas of business and launching new products and services," says A. Paegle.

EIB funding is available at a fixed interest rate for a period of up to three years; the maximum lending period for these funds is 10 years. The amount of funding available for one company is from 4’000 to 12.5 million Euros.