RIGA - Two of Latvia's most distinctive home-grown banks - the state-owned Hipoteku Banka and privately owned Aizkraukles Banka (AB) - teamed up July 15 to provide additional backing to the country's small and medium-sized enterprises (SMEs).
Hipoteku Banka chairman Inesis Feiferis and his Aizkraukles Banka counterpart, Olegs Fils, inked an agreement in Riga to create a 10 million euro pool that SMEs can draw on for essential investment in their businesses during the next year - which may be particularly handy in the uncertain economic climate of the present moment.
Under the terms of the agreement, Aizkraukles Bank has agreed to launch a Small and Medium Enterprises lending programme, while Hipoteku provides the funds required for implementation of the programme.
"This is a consequence of the cooperation we have already had over the years in many different areas," AB's Uldis Eglitis told The Baltic Times.
"But we hope this will have an impact that makes the rest of the market react. At 10 million euros the amount isn't so big compared with our existing loan portfolio, but the idea of teaming up with a government-owned bank to support small and medium enterprises certainly has additional value in it."
Hipoteku's Inesis Feiferis said the new fund is just the latest in a long line of initiatives he has overseen. "Today we are concentrating our efforts on SMEs, particularly enterprises that are in some difficulties during what some people say is the current 'crisis'.
"Usually we try to work with companies which are interested in producing something - industry, in other words - and secondly, services which are export-oriented or competing with companies in other countries because the current account deficit is pretty large," Feiferis added.
"Our main task is to find sectors in which the commercial banks are not active and try to find solutions for those sectors - it's how we've operated from the very beginning."