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Smaller Latvian firms to benefit from new €10 million EBRD credit line
A €10 million credit line from the European Bank for Reconstruction and Development (EBRD) to Latvijas Unibanka aims to promote the growth of Latvia’s small and medium-sized enterprises (SMEs). The line is the first extended to a Latvian bank under the SME finance facility launched by the EBRD and the European Commission in April 1999.
At the same time, Unibanka will benefit from a substantial technical co-operation package aimed at developing the SME lending programme, as well as a grant to help cover the costs of building this business. Both are being funded by the Phare program of the European Commission.
"This type of credit line is essential to address the lack of medium-term financing for small and medium-sized businesses, and to promote their development in Latvia and other European Union accession countries," said Steven Kaempfer, the EBRD’s Vice President for Finance. "As the largest lender to the Latvian economy, and with a country-wide branch network, Unibanka is well placed to reach local SMEs."
With a six-year maturity, the €10 million credit line will allow Unibanka to incorporate further lending to SMEs into its ongoing business. It will also provide much-needed medium term funding to SMEs to ensure the sector’s further growth. EU-Phare’s two-year technical co-operation programme will be used to provide long-term credit advisers and experts in various fields, and will also cover staff training costs at the start of the lending programme.
Unibanka was founded in September 1993 as a state-owned commercial bank, and was formed by the consolidation of a number of branches of the Bank of Latvia. It was partly privatised with EBRD support in early 1996, and its shares were listed on the Riga Stock Exchange.
Phare is currently the main channel for the European Union’s financial and technical co-operation with the countries of central and eastern Europe. Along with funds provided during the course of privatisation and restructuring Phare commitments to SMEs between 1990 and 1998 amounted to €12 billion.
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