Information on implementation of ERDF activity 2.2.1.4.“Loans for Raising of Business Competitiveness”:

Promotional Programme for Improvement of Business Competitiveness

(Implementer- Hipotēku banka)

Riga, 21 January 2010

Promotional Programme for Improvement of Businesses Competitiveness (ERDF Loans for Improvement of Competitiveness)

Programme aim: improvement of competitiveness of SME and large enterprises, thereby promoting economic development

Implementation period: April 2009 - December 2013 Planned: totally 430 loans of working capital and investment

loans Total amount of Programme: 58.5 million. LVL Financial sources: public financing (state + ERDF: 43.3 million.

LVL; bank: 15.2 million LVL). Separate loan fund has been created for lending

Conditions of Loans (ERDF)

Programme provide loans to entities registered in Latvia, who has economically viable future business and who has limited access to finance

Basically loans are intended for processing businesses and businesses, which attract financing from EU structural funds

Investment loans up to 5 million LVL (up to 10 years) Working capital loans up to 2.5 million LVL (up to 5 years) Total amount of loans (working capital + investment) can’t

exceed 5 million LVL Small and medium-sized businesses should attract business

owners (owns at least 10% of shares) as a guarantor Large companies should pledge at least 75% of company

shares or should attract business owners (owns at least 10% of shares) as a guarantor

Data of ERDF Loans for Improvement of Competitiveness (as at December 2009) :

Present approvals ~ 50% (29.5 million LVL) Approved 29 loans, average loan amount: 1 million LVL Programme will be finished by the end of 2011 In 2012 - 2013 businesses will be supported from the

repayments The most supported sectors so far are:- production of electricity 54%; - wood-processing 19%;- manufacture of power tools 8%;- cosmetics industry 5%- other industries 14% (food production; metal production; printing

industry; glass processing etc.)

ERDF loans

52% 54% 56% 57% 59% 61% 62% 66% 70% 74% 78% 81%

50%

30 535 31 535 32 535

58 600 58 600 58 600 58 600 58 600

34 535

43 25145 490

38 77441 013

47 729

36 535

33 53535 535

29 535

58 600 58 60058 600 58 600 58 600 58 600 58 600 58 600

0

10 000

20 000

30 000

40 000

50 000

60 000

tūks

t.LV

L

Piešķirtie aizd. /saņemtie resursi 50% 52% 54% 56% 57% 59% 61% 62% 66% 70% 74% 78% 81%

Piešķirtie aizd. (no programmas sāk.) 29 535 30 535 31 535 32 535 33 535 34 535 35 535 36 535 38 774 41 013 43 251 45 490 47 729

Saņemtie resursi 58 600 58 600 58 600 58 600 58 600 58 600 58 600 58 600 58 600 58 600 58 600 58 600 58 600

Dec.09 Jan.10 Feb.10 Mar.10 Apr.10 Mai.10 Jūn.10 Jūl.10 Aug.10 Sep.10 Okt.10 Nov.10 Dec.10

Loans commited

Loans funds

(total - 58,6 mln. LVL) (allocation term December 2011):- ERDF - 43,3 mln. LVL (61,6 mln. EUR)- Bank's own funds - 15,3 mln. LVL.

Allocation ratio, %

Amount of commited loans

(until 12.01.2010) - 29