OREANDA-NEWS. October 03, 2011. Enterprises which work in production and trade are in greatest need of funding from banks in Latvia, suggests Citadele Index research for the 2nd quarter conducted by Citadele Bank in collaboration with market and public opinion research centre SKDS. Small and medium enterprises in terms of the number of employees, companies with local capital and entities working on the countryside are the ones which need loan funds most, reported the press-centre of Citadele.

“Presently, a large part of small and medium enterprises in Latvia, especially the ones on the countryside, have become active thanks to the availability of EU and State support funds. It is of great importance for the recovery process of Latvia’s economy to make maximum use of the allocated EU funds since this is a significant support for the economy’s development in the nearest couple of years. Citadele also offers various funding opportunities for small and medium enterprises, such as funding from the European Investment Bank and micro-loan,” says Agnese Paegle, Head of Corporate Banking Sector of Citadele Bank.

Approximately 32% of enterprise managers working in production, 26% in trade, 16% in construction and 15% of their counterparts in services stated that their enterprise would need a loan or credit line now.

In terms of the number of employees it is small entities with a staff of 10 – 49 people (32%) and medium enterprises with 50 to 249 employees (30%) are in need of a loan. They are followed by large enterprises with 250 and more employees (23%) and micro-enterprises with up to 9 employees (19%). Conversely, in terms of turnover, enterprises with larger turnover (over 700 thousand Lats per year) (25%) need loans most and they are followed by enterprises the turnover of which ranges between 150 thousand and 700 thousand Lats per year (24%).

Companies with turnover that hovers between 50 thousand and 150 thousand Lats per year and entities with turnover between 15 to 50 thousand Lats per year (both a sound 23%) follow the leaders. Conversely, companies with turnover of less than 15 thousand a year (17%) are least needy of loan funds. Similarly with the beginning of the year, enterprises with local capital or a mix of local and foreign capital (correspondingly 21% and 19%) need loan funds most. Companies with purely foreign capital are in a comparatively smaller need of leans (10%) in turn.

In terms of regions, enterprises that represent Vidzeme region (28%) are in greatest need followed by Zemgale (26%), outskirts of Riga (25%) and Kurzeme (24%). Companies located in Latgale (18%) and Riga (16%) is the ones who need less loan funds.

Considering from the point of view of populated areas, enterprises which operate on the countryside (33%) are in greatest need of loans followed by companies in other cities (22%); Entities in Riga need loans less (16%).

As announced previously, Citadele Bank started issuing European Investment Bank’s funding for development of small and medium enterprises in July. 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 production, 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.

“EIB funding can assist small and medium companies in their current needs – increasing current assets, purchasing raw materials, goods, equipment and instruments, modernizing production 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.

Citadele Index research is conducted on a quarterly basis in order to find out entrepreneurs’ evaluation of the present situation and prognoses for the next 6 months in such fields as general economic activity in the State and corresponding business field. The previous research which was carried out in June 2011 polled 750 heads of companies of various sizes from all regions of Latvia represent various spheres of national economy.