Note: the texts under all the headings, with the exception of 'Results achieved', describe the situation before the start of the project.
Microcredit financing for micro enterprises and the self-employed in Latvia
The unemployment ratio in Latvia rose dramatically as a result of the world's economic and financial crises. The microcredit programme makes it easier for micro enterprises and the self-employed to obtain business loans and results in the creation of new jobs.
Promoting economic growth and improving working conditions
Access to external financing for micro-enterprises and SMEs
- Creation of jobs
- Increase in economic activity
- People who want to found companies
- Self-employed persons
- Self-employed people and micro enterprises with up to nine employees could apply for business microcredit of up to LVL 10,000 (about 14,000 euros). Upwards of LVL 5,000 (about 7,000 euros), the borrower had to contribute at least 10% equity capital. Interest rates were 5-8% per year.
- If the borrower fulfils all the provisions of the credit agreement, repayment of part of the loan – up to LVL 500 (about 700 euros) in larger cities and up to LVL 750 (about 1,000 euros) in rural areas – was waived.
- 1,063 microcredits allocated
- 2,650 jobs preserved or newly created
- Only 2,4% of the microcredits were non-performing
- Latvian Ministry of Finance
After boom years with 10% economic growth, Latvia's economy collapsed in 2008 from the effects of the worldwide economic and financial crisis. The country's economic output shrank by 18% in 2009 – a decline more dramatic than in any other EU country. Unemployment increased sharply, reaching almost 20% in 2010.
Incorporated companies with annual sales volume of up to LVL 1.4 million (about two million euros) and up to nine employees.
Because all goals were achieved, the project was officially concluded at the end of January 2015. The fund is now managed by the Latvian development finance institution ALTUM.
|Directorate/federal office responsible||
Swiss Contribution to the enlarged EU
Latvian Ministry of Economics and Latvian Development Financial Institution Altum
|Budget||Current phase Swiss budget CHF 7’923’078 Swiss disbursement to date CHF 7’923’078|
Phase 1 01.07.2011 - 31.01.2015 (Completed)