Crediting review "Crediting results last year. Will company investments result in stable long-term growth this year?"
"The forecast regarding company crediting was cautious last year because several indicators showed that the amount of funding might even decrease. The biggest concern was related to delayed accessibility to European Union Structural Funds. An active opening of funds did not happen, but an increase in crediting was facilitated by investment inflow in health and service areas. If the dynamics of funding demand will remain unchanged, at the end of this year or the beginning of next year at the latest the demand could reach two billion euro or 40% of the actual crediting capacity of banks," Sanda Liepiņa, president of the executive board of the Association of Latvian Commercial Banks (ALCB).
Manufacturing industry has become more competitive and ready for investments
"After an individual analysis of various industries the manufacturing industry can be singled out — data shows that companies in the industry have significantly increased their capital which is the main prerequisite to attract investment. The manufacturing industry composes 40% of the total national export — 4.1 billion euro. The average salary in the industry continues to grow and has currently increased from 725 euro to 845 euro. From a business perspective an increase in workforce salary can become a challenge if productivity is not simultaneously increased. For the time being the industry is growing at a persistent rate, producing products with added value that continues to increase and continuously becoming more competitive," Kārlis Danēvičs, co-chair of ALCB Crediting committee, member of the board of SEB bank.
"In the furniture production industry the salary increase is related to an increased amount of sales and services which in turn increases productivity and added value. The company "Daiļrade Koks" exports produce to more than 20 countries, including Germany, Denmark, USA, Sweden, Finland, Australia, New Zealand, Canada and even South Korea. Cooperation with banks is crucial — companies must be able to sustain long-term growth as well as increase competitiveness by investing in new machinery, production technology and the development of human resources," Andris Jansons, president of the executive board of Ltd "Daiļrade Koks".
In private crediting the demand for home loans has significantly increased
In 2016 new home crediting increased by 46% and reached 469.2 million euro. The main reasons for the increase in crediting amount is increased household income, low credit interest rates and the ALTUM family support program for home acquisition.
"The actual demand for mortgage loans is significantly bigger — residents would like to purchase a home but this is not always possible. The traditional reasons for credit refusal are underground economy, low purchasing power in regions and insufficient savings. However, the situation is improving — poor credit history is now seldom a reason for fund unavailability. Overall the dynamics of private crediting is optimistic and its growth will probably remain positive this year," Ainars Balcers, co-chair of ALCB Crediting committee, manager of the Swedbank center of private financing decisions.