TALLINN – Estonia's Minister of Entrepreneurship and IT Rene Tammist, members of the Estonian Banking Association and leaders of Kredex and the Rural Development Foundation met on Friday to discuss opportunities for improving the financing possibilities of business in rural areas.
"At today's roundtable we tried to find out how the support measures of the state have worked to date and whether it is possible through joint action to improve financing opportunities further and make credit available also outside of the major centers," Tammist said in a press release published by the Ministry of Economic Affairs and Communications.
The parties at the meeting tried to find ways for improving the possibilities for raising credit for the promotion of business and the acquisition and renovation of real estate in rural areas.
Financing the acquisition of real estate in rural areas is complicated as a result of difficulty selling the collateral and the small size of the potential market. Meanwhile, in the biggest cities business activity is more intense and possible selling of the property simpler.
The average size of a loan for the acquisition of a property outside Tallinn, Tartu and Parnu is significantly lower than the average for Estonia, which demonstrates these regions' lower capability for raising money.
As possible solutions, increasing the volume of underwriting by the state, raising the amounts of support for the renovation of apartment buildings and issuance of direct loans by Kredex or the Rural Development Foundation to entrepreneurs and apartment associations in need of such support were explored at the meeting.