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EBRD promotes growth of private sector in Latvia
€5 million loan to fourth largest bank supports SMEs
Latvia's small and medium-sized enterprise (SME) sector will get a boost from a €5 million loan from the European Bank for Reconstruction and Development to Rietumu Banka, the country's fourth largest bank. The EBRD's loan is complemented with €500,000 being made available in grant funds by the European Commission (EC) to provide training and advice to staff
Andrew Rasbash, Head of the EU Delegation in Latvia, underlined the importance of SME financing to the sound development of the Latvian economy and welcomed the role of the EBRD in supporting private sector development in this way. He noted that this loan is part of the EU SME Finance Facility, a programme of the EC in cooperation with the EBRD, Kreditbank für Wiederaufbau, and the Council of Europe to facilitate access to funding from banks of up to €125,000 and to promote their growth and development. Rietumu Banka is the fifth bank in Latvia to receive such financing following Unibanka, Hansabanka, Mortgage and Land Bank and Pirma Banka.
Kurt Geiger, Business Group Director for Financial Institutions at the EBRD, said the loan will help Rietumu Banka broaden its activities into Latvia's expanding SME sector. That will strengthen not only the small business sector, but also Rietumu's overall portfolio making it a strong competitor amongst other banks in Latvia.
Founded in 1992, Rietumu Banka, owned by a number of private individuals, provides commercial banking services primarily to businesses. Michael Bourke, President & CEO, said the five-year loan will support the bank's growth and enable it to build a portfolio of good-quality medium-term loans. He said providing loans to SMEs will strengthen its long-term relationships with clients and help develop the local economy. He added: "This facility fits in very well with our focus on corporate clients. We are actively communicating with potential clients and we are very happy by their initial reactions to this program."
The EU SME Finance Facility was launched in April 1999 under the Phare Programme by the EC, originally with the EBRD and now with other international financing institutions as partners to encourage SMEs' growth and development by facilitating their access to loans, leasing and equity finance from local financial intermediaries in the candidate countries.
The Phare Programme is currently the main channel for the European Union's financial and technical co-operation with the candidate countries of Central and Eastern Europe. The budget earmarked for the Phare Program as a whole is approximately €1.7 billion per year.
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