Latvian Entrepreneurs Raise Financing Less Often Than the European Average, with the Gap Reaching 25 Percentage Points

The latest Signet Bank survey[1] of entrepreneurs shows that Latvian companies’ plans to raise financing for future development have remained stagnant since 2023. The level of ambition has fluctuated between 19% and 21%, changing by only about one percentage point year over year. Although understanding of the availability and diversity of financing is gradually improving, it has not yet become a strong enough catalyst to turn knowledge into more active action that would support broader use of financing and, in turn, the country’s overall economic growth.

The survey shows that only 20% of entrepreneurs plan to raise financing for business development over the next 12 months, while 56% do not plan to do so and 25% have not yet made a decision. This cautious approach among entrepreneurs, which has to some extent become a stable trend, has persisted for several years.

The most frequently cited reasons holding companies back from raising financing are bank policies (23%), bureaucracy (20%), and the economic and political environment (20%). State policy (7%) and the company’s own financial difficulties (5%) are mentioned less often. These factors form a set of external conditions to which businesses must adapt; however, risk perception and understanding of financing opportunities for business growth continue to play an important role.

A similar trend is also highlighted in the European Investment Bank’s (EIB) Investment Survey 2025[2], which identifies Latvia as one of the European Union (EU) countries where bank financing is used least frequently. According to EIB data, approximately 54% of Latvian companies use bank financing, compared with the EU average of around 79%. Latvia lags behind the European average by 25 percentage points, pointing to challenges in the use of financing and continued caution among entrepreneurs when making investment decisions.

Roberts Idelsons, CEO of Signet Bank, comments:

“In Latvia, only one in five entrepreneurs plans to raise financing for business development over the next 12 months, while more than half do not plan to do so at all. This is not a question of financing availability, as financing is sufficiently available in Latvia. Rather, it is a question of entrepreneurs’ readiness to actively invest in business development and make use of the financing opportunities available, including both traditional bank loans and capital market financing. If we want faster economic growth, the next step is clear: we must strengthen financial literacy, reduce administrative barriers, and create an environment where investment becomes the norm rather than the exception.”

Entrepreneurs’ Understanding of Financing Availability Remains Mixed

Signet Bank’s survey shows that entrepreneurs’ perceptions of financing availability in Latvia remain divided. Some 30% of entrepreneurs believe that financing opportunities in Latvia are diverse, while an equal share (30%) believe the opposite. This proportional balance of views, together with the high share of “hard to say” responses (40%), points to growing uncertainty among entrepreneurs and an inconsistent understanding of financing availability in Latvia.

Most entrepreneurs who believe that diverse financing is not available cite low competition among banks as the main reason (26%). Others believe financing is mainly available to large or financially strong companies, or only in Riga (22%). Some respondents also point to a lack of information (15%).

“To encourage more active use of financing for business development, it is essential to strengthen entrepreneurs’ ambition while also improving financial literacy. The central purpose of entrepreneurship is to generate profit and create value, and raising external financing is a powerful tool for achieving these goals. Entrepreneurs themselves therefore play an important role in recognizing diverse financing alternatives as an opportunity for growth rather than a risk. The relatively high share of companies with no planned investments points to polarization in the business environment: some companies are expanding rapidly, while others remain in a wait-and-see position or postpone business development decisions. This creates a gap between growth-oriented companies and those that are more cautious or constrained, which in turn affects the overall pace of economic development. Strengthening capital market knowledge, building a clearer understanding of financing instruments, and working purposefully with entrepreneurs may become among the key prerequisites for faster and more resilient economic growth in Latvia,”

emphasizes R. Idelsons.

[1]Signet Bank’s survey “Financial Sentiment Among Latvian Entrepreneurs,” conducted in February 2026 by the agency Mindshare Latvia. The survey involved 505 business owners, managers, and CFOs, who provided their assessment of the current situation and development prospects for the 2025–2026 period.

[2] European Investment Bank’s Investment Survey 2025