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On the ability of entrepreneurs to borrow. In lending, the desire of entrepreneurs to borrow, the willingness of banks to lend, as well as the ability of both parties to borrow and lend are equally significant. These four components form the Lending Index, which we are currently developing so that the public can see a more objective picture of what is happening in lending. It must be said that even regarding the ability of entrepreneurs to borrow, in the case of Latvia, we more often encounter risks related to reputation, attitudes towards sustainability issues, and the origin of capital. In very many cases, these issues deter banks from granting loans, and it is not even a question of overly strict requirements from the regulator, but of the banks' own desire to expose themselves to reputational risks. It is worth examining who operates and is able to invest, for example, in the port of Klaipėda, and, in turn, who historically operated and often continues to operate in Latvian ports.

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An example from my daily work on the Baltic credit committee comes to mind. 15 years ago, we granted loans to two similar companies – one in Latvia, the other in Lithuania. Both have fared relatively well, and recently they came to the bank with requests for new loans, and both requests were approved. Looking at the financial data, I see that the Lithuanian company is now about four times larger and wants to borrow as much as eight times more than its Latvian colleagues. The Latvian company has been quicker to withdraw dividends and has been very cautious in investing, while the Lithuanians have left the majority in the company's capital and have invested quite aggressively. There have been different types of priorities, and these seemingly insignificant choices have ultimately become decisive.
Full article:
https://www.delfi.lv/bizness/versijas/karlis-danevics-gribu-kliedet-dazus-mitus-kas-kultive-greizu-prieksstatu-par-bankam.d?id=55436844