Latviski English По-русски
Friday 22.09.2017 | Name days: Maigurs, Mārica, Māris

Economic Diary of Latvia. How to lend money to another and still profit from it

(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RU«According to results of a recent survey by SKDS, 69.6% of Latvian residents do not support amendments to increase micro-enterprise tax from 9% to 11%,» – says Chairman of Latvian Chamber for Commerce and Industry Janis Endzins.

The representative of the entrepreneurial organizations nonetheless positively views the decision of the National Economy Committee to support amendments aimed to maintain the tax rate at 9% for the first three years of economic activity.

«This may help us fix the mistake made by the last parliament to increase micro-enterprise tax from 9% to 11%,» – comments Janis Endzins.

First arrivals

From January 15th and onward, Citadele bank received more than 800 applications regarding requests to receive mortgage loan with state guarantee, which is provided at beneficial terms and reduced first instalment.

The biggest degree of interest has been noted for housing worth EUR 7,000 to EUR 23,000. Approximately 70% of applications have been received from residents of Riga and Riga region. 30% of applications have been received from residents of other regions, as reported by Citadele Private Crediting Department Baiba Tetina.

As previously reported, Citadele bank is currently the first and only participant of the state support programme aimed to assist Latvian families with children to acquire housing. As part of the state support programme, residents can expect to be provided with funding from banks worth up to 95% of market price of the desired property.

Under circumstances of real estate property becoming more expensive in Latvia, the launch of the programme may prove quite useful. According to Eurostat, Latvia is among leaders in terms of real estate price growth in 2014. Ireland is on the first place (+15%), Estonia is on the second (+13.2%). Latvia, UK and Sweden are on the third (+10.3%).

Lend to someone else and still profit from it

A new project for mutual crediting for private persons – Mintos – has been launched in Latvia. Representatives of the company position themselves as ‘competitive alternative to bank crediting’.

67 loans worth a total of EUR 550,000 have been issued and 150 investors have been attracted, as reported by co-founder of the company Martins Sulte.

This platform has been created in order for private persons to use their funds to invest in loans for other private persons. This is a new thing for Latvia, but USA, China and Europe have been working with such programmes for a long time.

The structure of the platform is simple: the lender has to fill in a form. His solvency is then inspected, as is information from Credit Register. After the in-depth inspection, the company issues a loan from its own funds. Only after all this the company offers residents to perform investments in specific loans. Investors also have the right to re-sell their investments. The minimal investment rate is EUR 10.

If the lender is unable to pay back the money in time or completely halts the payment of interest or the main amount, the company has the right to buy out problematic investments.

The offered rates make the project attractive for investors and lenders. The company is also paid a portion of the money as well.

Latvian enterprises steer clear of innovations

Only 30.4% of Latvian enterprises had performed the introduction of investments over the course of 2010-2012, which is the fourth lowest index in Europe, according to data from Eurostat.

For example: the average index across Europe is 48.9%, in Lithuania – 32.9%, in Estonia – 47.6%.

The leading countries in regard to the proportion of innovative companies are Germany (66.9%), Luxembourg (66.1%) and Ireland (58.7%).

It is worth noting that the proportion of innovative enterprises in the EU has declined from 52.8% to 48.9% in 2008-2010. In Latvia, on the other hand, this proportion has increased from 29.9% to 30.4%.

Information from Eurostat was compiled based on innovative products and processes, as well as marketing and management.

According to a survey by SEB Bank in Baltic States, the number of companies that plan to introduce innovations continues to decline in Latvia and continues to rise in neighbouring republics.

Last year, 48% of enterprises in Latvia had planned to invest in innovations. In reality, only 39% ended up actually investing. Estonia’s indexes were 60% and 73% respectively and those of Lithuania – 42% and 69%.

The majority of companies that plan to introduce innovations work in IT and communications (69%), entertainment (57%), industry and energy (56%) sectors.


Leave a reply

Number of bankruptcies down in Latvia and Estonia but up in Lithuania

Last year, the number of bankruptcies declined 12.4% in Latvia and 10.9% in Estonia. Lithuania, on the other hand, had experienced a 35.2% increase in the number of bankrupt companies, according to information compiled by Coface.

Lithuania sets off alarm bells over quality of international brands' foods

What Lithuania‘s State Food and Veterinary service announced last Tuesday was big news in Lithuania, but not so of a discovery to the majority of Eastern European consumers - food of international brands sold in Western Europe and in Eastern Europe, and Lithuania, are not just the same.

Saeima forms a group to support HIV and tuberculosis patients

On Thursday, 21 September, Latvia’s Saeima agreed with deputy Hosams Abu Meri’s proposal to form a deputy group to support HIV and tuberculosis patients, as confirmed by Abu Meri’s assistant Edgars Ikstens.

Politologist comments whether Vējoņis’ authority is at risk or not

Saeima’s vote in which Latvian President Raimonds Vējoņis’ proposal on the status of non-citizens’ children was not pushed forward was as though a strike against the president’s authority, comments Filips Rajevskis.

In pictures: Mexicans rush to find quake survivors

A massive rescue effort is continuing in Mexico City and other areas in Mexico to find possible survivors caught under buildings that collapsed in the September 19 earthquake, which has killed no less than 237 people.

Producer prices in industry grew 0.1% in August

Compared to July, the level of producer prices in Latvian industry rose by 0.1 % in August 2017. Prices of products sold on the domestic market, as well as those of exported products grew by 0.1 %.

Saeima supports simplification of investigation of less serious crimes

On Thursday, 21 September, Latvia’s Saeima conceptually supported changes to the Criminal Process Law that provide for simplification of investigation procedures of less serious crimes.

Ozoliņš: transit and logistics industries should communicate more actively

Mutual communication and information exchange among businesses working in the industry is the pre-condition for improvement of Latvia’s transit industry, said Transport Ministry’s state secretary Kaspars Ozoliņš at a meeting of the Logistics Council.

As Estonia mends ID cyber vulnerability, officials recommended mobile ID

As Estonia tries to solve potential security risks found in the chips of 750,000 national ID cards, state officials using e-services have been recommended to Mobile-ID in addition to ID cards.

Vējonis: peaceful resolution of Ukraine’s conflict is Latvia’s priority

«Russia’s unjustified aggression towards its neighbours is a serious breach of international law. Any aggressor who begins and continues such conflicts should be brought to justice for breach of international law,» says Latvian President Raimonds Vējonis.

Authorities apprehend criminal group that caused 1.7 million euros worth of damage to the state

Latvian State Revenue Service’s Finance Police in cooperation with State Police anti-terrorism unit Omega neutralized a criminal group that specialized in VAT fraud and money laundering, as confirmed by SRS representative Evita Teice-Mamaja.

Russia pledges to respect Beslan siege ruling on 2.9 million euros

European Court of Human Rights has dismissed Russia's appeal against its ruling that excessive force was used to end the Beslan school siege in 2004 leaving 330 people dead and Russia has stated it would comply with a ruling requiring it to pay 2.9 million euros in damages.

Rinkēvičs proposes radically reforming work of UN peacekeeping missions

Latvian Foreign Affairs Minister Edgars Rinkēvičs proposes radically improving United Nations Organization’s rapid response capabilities in peacekeeping missions, as reported by Foreign Affairs Ministry.

Spanish PM urges Catalonia to stop escalation around independence referendum

The Prime Minister of Spain Mariano Rajoy has insisted in a televised speech that separatists in the Catalonia regional government should stop preparations for the October 1 referendum, which he has called a chimera.

Multiple Latvian deputies stand in favour of education only in state language

Coalition partners are prepared to consider National Alliance’s possible proposal for a transition to education only in state language.

KNAB to procure 66 high-class safes for EUR 78,000

Latvia’s Corruption Prevention and Combating Bureau announced last week a procurement procedure for 66 first-class safes, as confirmed by KNAB and Procurement Monitoring Bureau.

Comprehensive Economic and Trade Agreement between EU and Canada comes into force

On Thursday, 21 September, the Comprehensive Economic and Trade Agreement between the European Union and Canada came into force, as confirmed by European Commission’s r press service in Latvia.

Ašeradens: productivity of Latvia’s economy is far behind Europe

Productivity of Latvia’s economy is far behind Europe – 43% behind the average productivity level in the European Union is actual prices, said Economy Minister Arvils Ašeradens in an interview to Neatkarīgā newspaper.

In pictures: Diversity of heads of state UN General Assembly

What suits and costumes have been chosen by presidents of 12 countries in several continents? BNN has compiled a picture gallery devoted to the UN General Assembly taking place this week in New York.

LVSADA is satisfied with healthcare funding legislative draft

The council of Latvian Health and Social Care Workers' Union has decided to conceptually support healthcare funding legislative draft, which was developed in cooperation with Healthcare Ministry, Association of Latvian Hospitals and Latvian Employers’ Confederation.

Riga Airport becomes part of TOP 5 of Europe’s rapidly growing airports

16.2% passenger number increase has allowed Riga International Airport to become one of five most rapidly growing airports in Europe in July. Riga airport has entered the group of airports whose number of serviced passengers reaches 5 – 10 million a year, according to information compiled by Airport Council International.

Producer prices in Estonia rise 4.7% August-to-August

The producer price index of industrial output in Estonia has from July to August this year grown by 0.8%, but from August last year – by 4.7%, Estonian statisticians have estimated.

Nordea and DNB merge to officially happen on 1 October

In accordance with the recent decision of the European Commission to approve the plans of Nordea and DNB Bank to merge their activities in Baltic States, the business deal will take place officially on 1 October 2017.

Kaljulaid in UN underlines effects of climate change and lack of women in peace talks

As the Estonian President Kersti Kaljulaid made her first address at the UN General Assembly on Tuesday, September 19, she pointed out to world leaders effects of climate change and need to involve more women in peace talks.

Pabriks: Russia failed to intimidate anyone with Zapad exercises

Information acquired during Zapad 2017 military exercises will be enough to assess the tactics used and strategy, said MEP Artis Pabriks in an interview to Rīta panorama programme of LTV.