The milestone provides another indication that Latvia has emerged from what was at one point Europe's deepest financial crisis - at least before Greece took over the unwanted title.
"In 2015, commercial banks' total loan portfolio has increased by 0.1%. It means that for the first time in seven years, there are more granted loans than written-off loans," LACB said.
"The positive changes have been driven by increased lending to enterprises – new loans granted to the Latvian enterprises amount to 1.34 billion euros, an increase of 5% than the year before. However, banking experts suggest that 2016 will bring lots of challenges – the delay in opening the EU funds has a negative impact on both individual sectors and the economy as a whole."
“There has not been a positive loan portfolio in Latvia since 2008. However, it is too early to assess whether the trend is going to continue," said Kārlis Danēvičs (SEB banka), Co-Chair of the Lending Committee of ALCB.
Almost a third of the loan portfolio (29.3%) or 1.84 billion euros were distributed among small enterprises that employ up to 50 people. Almost one fifth (23.9%) or 1.5 billion euros were given to micro-enterprises that employ up to 10 people.
“To finance an enterprise, it is not the size of it that is important, but the vitality. If the finances are in order – there is a concise business plan and the flow of finances is adequate and transparent –, if the manager is competent and experienced, and if the enterprise has a sufficient security, the banks will be interested in financing and will compete for the chance to work with such a client,” said Ieva Vērzemniece (Citadele banka), a member of the ALCB lending committee.
However, entrepreneurs are currently showing little interest in loans, ALCB claims – 40% do not plan to invest in business development this year, although 29% are aiming for new or current export markets.