Significant increase in funding issued to businesses operating in the regions: with agriculture and forestry being the most popular sectors

Last year, SEB banka’s financing for Latvian small and medium-sized enterprises (SMEs) totalled to EUR 290.8 million, which is EUR 15.3 million more than in 2022. Over 65% of the funds were issued to SMEs operating in Latvia’s regions. 

Of the funds provided by SEB banka in 2023, EUR 41 million have contributed to the development of entrepreneurs operating in the vicinity of Riga, EUR 59.8 million have been allocated to entrepreneurs in Riga, and EUR 189.9 million have been issued to SMEs in all regions of Latvia. Overall, the total amount of financing granted to SMEs in Latvia has grown steadily in recent years, with the agricultural and forestry sectors developing the most.

Trends remain

Last year, companies in the agriculture and forestry sectors were the most active in investing in their development, with almost EUR 110 million in financing provided to businesses in these sectors. The retail and wholesale sector received EUR 35.4 million, followed by manufacturers with almost EUR 30 million. Overall, these sectors accounted for almost 60% of the total amount of SME finance in Latvia last year. 

“Agriculture, forestry and manufacturing have received the largest share of SEB financing in 2023, as these sectors are capital intensive and their regular development requires independent investments in equipment, land and industrial buildings. The increase in trade finance is due to the need for working capital," says Ģirts Priede, Head of Small and Medium Enterprises Finance at SEB banka. 

Zemgale takes the lead
 
As far as the regions are concerned, last year most of the funds, EUR 67 million, were allocated to entrepreneurs in Zemgale, EUR 14.6 million more than in 2022 and EUR 36.3 million more than the year before. In Zemgale, as in Latvia as a whole, most of the loans (EUR 36.5 million) were invested in the agriculture and forestry sector. In addition, almost EUR 10 million was granted for water supply, wastewater disposal, waste management and the remediation of contaminated sites, as well as EUR 8.2 million for the manufacture of products. 

Zemgale is followed by Vidzeme, where almost EUR 50 million in SME loans were granted last year, which is also a slight increase compared to 2022. Compared to other regions, Vidzeme has seen the most activity from transport companies, becoming one of the most active sectors with EUR 6.5 million in loans, only slightly behind the manufacturing sector with EUR 8 million. 

In Kurzeme and Latgale, the volume of loans to SMEs decreased last year. In Kurzeme, the total amount of loans granted to SMEs reached EUR 45.1 million. Wholesale and retail trade was also among the most financed sectors in Kurzeme, slightly ahead of transport companies with EUR 6.1 million in loans. 

While the construction sector is more active in Latgale, where the fewest loans were granted (EUR 28.2 million), than in other regions, almost EUR 3.3 million was granted to construction companies, making it one of the most active borrowing sectors in Latgale. Here, as in Vidzeme, companies in the manufacturing sector have performed particularly well.