Analytics, Good for Business, Investments, Latvia, Markets and Companies

Businessmen in regions and at large companies are planning more active investment policy this year. Swedbank Customer Service Administration's head Vadims Frolovs explains that in regions, investment activity is mostly associated with the agricultural sector and availability of structural funds. Furthermore, now that milk quotas have been lifted in the European Union, dairy output is no longer regulated.

One-third of the companies planning investment this year say that they will invest up to EUR 50,000 in development. Another 33% are planning to invest more than EUR 500,000, of which 11% are considering putting in over EUR 2 million.

Microenterprises and small companies mostly plan to invest either up to EUR 10,000 (32%) or EUR 10,000 to EUR 50,000 (27%). Medium-sized and large enterprises, on the other hand, most often plan investments of EUR 100,000 to EUR 500,000 (27%) or from EUR 500,000 to EUR 2 million (27%).

Three-fourths of companies that have decided their investment plans for this year say that own funds will be the main source for investment. 40% plan to borrow money from a bank, and 13% named government's support.

19% of microenterprises and small companies each plan to use government aid to implement their investment plans. On the other hand, 52% of companies in the regions say they will borrow money from a bank, which is more than in Riga and Greater Riga Region (31%).

When asked to evaluate their knowledge about various funding sources, companies' representatives generally said that they had good knowledge of borrowing from commercial banks (4.03 out of five points on the average). Businessmen know much less about opportunities offered by venture capital funds (2.64 points), micro-loans (2.54%), and unsecured loans (2.4 points). Businessmen are the most skeptical about business angels – 62% of respondents said they had no information about this option.

Swedbank survey was carried out in cooperation with Omincom Media Group at the end of April and beginning of May. Representatives from 100 companies of various sizes participated in the survey, including company owners, executive officers, finance directors, and accountants.

According to the bank's estimates, there are 25,000 companies in Latvia that can freely borrow money from banks.