OCDE - Financing SMEs and Entrepreneurs 2026 - Letonia de 2026

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FINANCING SMES AND ENTREPRENEURS 2026: LATVIA © OECD 2026

Key facts on SME financing Latvia's economy has weathered recent shocks and is regaining growth momentum . In 2023, geopolitical uncertainty, high prices and rising interest rates led to a 0.9% GDP contraction, with declines in private consumption, exports and imports offset by rises in government spending and investment. Inflation eased in 2024, but the economy contracted in H1 before expanding in H2, resulting in flat ann ual GDP. Private consumption and exports grew modestly; government consumption and investment fell. In Latvia 99.8% of all individual merchants and commercial companies are SME s and 94.1% of SMEs were micro-sized. In the Latvian ‘non-financial business economy’, SMEs account for 69.8% of valueadded and 76.2% of employment, significantly higher than the respective EU averages of 53.1% and 65%. In 2024, the interest rate for SMEs stood at 7.46%, approximately 20% higher than in 2023, when the rate was 6.21%. In contrast, the interest rate for large firms in 2024 was 6.05%, reflecting a 3.6% increase compared to 2023, when it stood at 5.84%. The interest rate spread in 2024 was 1.4 1 percentage points, compared to 0.37 percentage points in 2023. Consequently, the spread widened by 281.08%. Th is increase in interest rates for SMEs is primarily attributable to the active participation in lending by mediumand large-sized domestic banks, which typically apply higher rates than t heir major international counterparts. Overall, the situation should be regarded positively, as the involvement of these mid-tier and smaller banks has significantly enhanced access to financing for small and medi um-sized enterprises, thereby supporting their growth and competitiveness.

and large-sized domestic banks, which typically apply higher rates than t heir major international counterparts. Overall, the situation should be regarded positively, as the involvement of these mid-tier and smaller banks has significantly enhanced access to financing for small and medi um-sized enterprises, thereby supporting their growth and competitiveness. The number of SME insolvencies has fallen sharply since 2009, from 2 202 cases to a mere 302 in 2022. This was followed by a moderate decline, with insolvencies decreasing to 242 in 2024, showi ng improved financial discipline and effective state support. The establishment of Altum in 2014 as a national development finance institution has significantly enhanced SME access to a comprehensive range of financial instruments, including loans, guarantees, and equity, thereby addressing market failures through the effective utilisation of EU Structural Funds. Key initiatives include: • Altum’s credit guarantee programme, operational since 2016 and backed by over 80 million EUR in EU funding, has issued 440 guarantees worth 24.7 million EUR by October 2025, enabling SMEs with limited collateral to secure up to 80% of loan principal. • In 2024, Altum’s export credit guarantees were issued in the amount of EUR 3.88 million supporting a total of 25 companies. In 2025, export credit guarantees were issued in the amount of EUR 5.26 million, with the total number of supported companies reaching 33.Energy effi ciency loans with capital rebate for businesses: Under the Recovery and Resilience Facility, 53 million EUR has been deployed by Q3 2025 to 487 firms, facilitating energy upgrades and renewable adop tion projected to cut CO₂ emissions by 14,527 tonnes annually. Latvia2 

FINANCING SMES AND ENTREPRENEURS 2026: LATVIA © OECD 2026

• SME Growth Loans: Continued across EU programming periods, SME growth loans hav e approved 54.1 million EUR for 209 projects by September 2023, with an additional 12.62

FINANCING SMES AND ENTREPRENEURS 2026: LATVIA © OECD 2026

• SME Growth Loans: Continued across EU programming periods, SME growth loans hav e approved 54.1 million EUR for 209 projects by September 2023, with an additional 12.62 million EUR contracted for 37 firms in 2021–2027, leveraging 6.8 million EUR in private funds. • Start-up and microloans, loans for micro companies: The start-up loan programme, active s ince 2016, has disbursed 18.3 million EUR across 750 loans and 3.1 million EUR in 227 microloans by September 2023; the 2021 –2027 measure has supported 515 firms with 24.78 million EUR , including 299 new enterprises. • Investment fund (state funded): The 292,06 million EUR Investment Fund, launched in 2021, offers loans with up to 30% capital rebates for projects over 10 million EUR.

So far, within the first three rounds of project application selection, 26 projects have been approved for funding, with a total value of more than EUR 641.7 million and applicable capi tal rebates amounting to EUR 166.5 million. The projects are expected to achieve specific indic ators: an increase in exports of at least EUR 329.5 million, the creation of 1 226 new well -paid jobs, and investments in research and development exceeding EUR 18.2 million. From November 2025 to March 2026, the fourth selection round took place with available funding of EUR 64 million. A total of 42 applications were received, with a combined investment volume of EUR 848 million and requested capital rebates amounting to EUR 247.9 million. O f these, 4 projects were military projects, with a total investment volume of EUR 117.4 million and requested capital rebates amounting to EUR 34.8 million. In line with its 2023 initiative to create and fund the Baltic SME IPO Fund, the Latvian government

4 projects were military projects, with a total investment volume of EUR 117.4 million and requested capital rebates amounting to EUR 34.8 million. In line with its 2023 initiative to create and fund the Baltic SME IPO Fund, the Latvian government announced on 29 September 2025 that ALTUM, partnering with Lithuania’s ILTE, has launched the Baltic Capital Markets Acceleration Fund “1 Asset Management”, the region’s first such initiative. Valued at over 50 million EUR, the fund will support Baltic firms preparing for IPOs, accelerate local capital market growth, and benefit from private investments by “1 Asset Management” and “Baltic Partners”. 3

FINANCING SMES AND ENTREPRENEURS 2026: LATVIA © OECD 2026

Table 1. Scoreboard for Latvia Indicator Unit 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Debt Outstanding business loans, SMEs EUR million 7 727 8 672 8 376 7 764 7 035 6 154 5 404 4 939 4 771 4 942 4 482 4 110 3 922 3 648 3598 4 119 4 398 4 620 Outstanding business loans, total EUR million 8 865 10 359 9 681 8 888 8 212 7 474 7 058 6 379 6 274 6 373 5 887 5 591 5 481 5 017 4 961 5 418 5 350 5 629

Share of SME outstanding loans % of total outstanding business loans 87.16 83.71 86.52 87.34 85.67 82.34 76.57 77.43 76.05 77.55 76.1 73.52 71.57 72.71 72.52 76.03 82.21 82.07 New business lending, total EUR million

1 708 1 914 1 965 1 268 1 346 1 795 1 347 1 312 1 558 1 650 1 825 2 533 1 868 2 245 New business lending, SMEs EUR million

1 506 1 625 1 613 1 020 947 1 399 974 1 012 1 075 855 1 113 1 573 1 473 1 690 Share of new SME lending % of total new lending

88.20 84.90 82.08 80.47 70.39 77.95 72.3 77.19 69.01 51.81 61.0 62.1 78.86 75.28 Outstanding short-term loans, SMEs EUR million 2 653 3 203 3 262 3 009 2 682 2 349 1 852 1 570 1 672 1 371 1 287 1 229 1 179 975 764 968 877 984 Outstanding long-term loans, SMEs EUR million 5 048 5 409 4 912 4 701 4 353 3 805 3 552 3 369 3 099 3 571 3 195 2 894 2 743 2 673 2 834 3 151 3 521 3 636

Share of short-term SME lending % of total SME lending 34.4 37.2 39.9 39 38.1 38.2 34.3 31.8 35.1 27.7 28.7 29.8 30.1 26.7 21.2 23.5 19.9 21.3 Non-performing loans, total % of all business loans 0.7 3.2 20.2 20.8 16.4 9.7 6.9 5.9 4.4 2.7 3.1 2.5 4.4 2.5 1.3 0.6 0.44 0.42 Non-performing loans, SMEs % of all SME loans 0.8 3.7 22.4 23.4 18.8 11.7 8.4 7.2 5.7 3.3 3.8 3.3 3.8 2.3 1.8 0.9 0.54 0.51 Interest rate, SMEs % 8.3 8.9 7.9 7.1 5.8 4.5 4.5 4.7 4.5 4.4 3.8 3.8 4.0 4.4 4.2 4.0 6.21 7.46 Interest rate, large firms % 6.6 7.1 5.2 4.3 4 3.6 3.8 3.3 3.1 2.5 2.6 2.7 2.9 2.9 2.7 3.1 5.84 6.05 Interest rate spread Percentage points 1.7 1.8 2.7 2.8 1.8 0.9 0.7 1.4 1.4 1.9 1.2 1.1 1.1 1.5 1.5 0.85 0.37 1.41 Non-bank finance

Non-bank finance Venture and growth capital EUR million

37.95 51.98 79.37 101 118 157.5 147.6 211.6 248.9 256.8 278.4 Venture and growth capital (growth rate) %, Year-on-year growth rate

36.97 52.69 27.76 16.45 33.38 -6.29 43.36 17.63 3.17 8.41 Leasing and hire purchases EUR million 1 576 1 594 1 145 841 810 867 875 864 932 939 1 034 1 103 1 075 944 874 959 1 050 1 122 Factoring and invoice discounting EUR million 227.2 301.9 149.1 60.7 90.96 96.15 108 114.5 151.8 166 152.6 173.4 161.8 137 167.3 142.8 184.9 194 Other indicators Bankruptcies, SMEs Number

1 292 2 202 2 714 898 884 820 959 803 731 590 592 580 375 242 302 242 265 Bankruptcies, SMEs (growth rate) %, Year-on-year growth rate

70.43 23.25 -66.9 -1.56 -7.24 16.95 -16.4 -8.85 -19.3 0.34 -2.03 -35.3 -35.5 24.79 -19.9 9.5 Note: The most recent available data on bankruptcies pertain to 2023 and encompass all enterprises, without separately distinguishing SMEs4 

FINANCING SMES AND ENTREPRENEURS 2026: LATVIA © OECD 2026

Macroeconomic and financing conditions The Latvian economy has successfully navigated the shocks of recent years and is currently growing again.

FINANCING SMES AND ENTREPRENEURS 2026: LATVIA © OECD 2026

Macroeconomic and financing conditions The Latvian economy has successfully navigated the shocks of recent years and is currently growing again. Although the pace of inflation stabilised, the adverse external environment caused the economy to continue contracting during first half of 2024, nevertheless, GDP expanded in the second half of the year. On an annual basis, GDP remained unchanged from the previous year. Private consumpti on and exports recorded modest growth, whilst government consumption and investment declined. In 2025, a gradual recovery in economic activity is observed. In the first half of the year, GDP rose by 1.3% compared with the corresponding period of the previous year, driven largely by a shar p increase in investment. The upturn in activity has been supported both by somewhat faster growth in Latvia’s principal trading partners and by government measures to stimulate the economy, particularly in the areas of lending and investment. This trend continued throughout 2025, with GDP increasing by 2. 1%, confirming that the Latvian economy has managed to overcome the upheavals of recent years. Private consumption is growing slowly, notwithstanding the rise in real wages. Consumer caution continues to be influenced by high price levels, inflation expectations, and uncertain ty surrounding the geopolitical situation. In 2024, as inflation stabilised and households’ real incomes increased, private consumption edged up by 0.1%. In the first half of 2025, private consumption fell by 0 .4% compared with the corresponding period of the previous year. Investment activity in the Latvian economy is significantly affected by the ge opolitical situation, the ability of financing and production resources, and other external and domestic factors . In 2024, investment fell by 7%, largely owing to a weakening in private investment. Thanks both to the accelerated ab sorption of EU funds and to the revitalisation of private sector lending, investment in the first half of 2025 increased by 7.9% compared with the corresponding period of the previous year. At the same time the acc umulated

by 7%, largely owing to a weakening in private investment. Thanks both to the accelerated ab sorption of EU funds and to the revitalisation of private sector lending, investment in the first half of 2025 increased by 7.9% compared with the corresponding period of the previous year. At the same time the acc umulated foreign direct investment (FDI) in Latvia continues to grow, confirming the attractiveness of the investment environment. At the end of 2024, the total amount of accumulated FDI in Latvia exceeded more than EUR 26 billion, which is appr oximately 65% of the country’s GDP. As well as investor confidence in Latv ia, according to the FICIL “Sentiment Index 2024” data, has improved. Inflation has been most significantly influenced by rising global prices for en ergy and food. In December 2024, consumer prices were 3.3% higher than in December of the previous year. The overall annual price increase was driven substantially by a 6.3% rise in services prices and a 5.5% increase in the prices of food and non-alcoholic beverages. By contrast, average annual inflation in 2024 was markedly lower than in 2023, standing at 1.3 %. In 2025 overall, average annual inflation has been higher than in 2024, reaching 3.4% by September. Owing to the unfavourable external environment, labour-market activity edged down slig htly in 2024. The number of employed persons fell by 0.8% (equivalent to 6 800 individuals), wh ile the unemployment rate rose by 0.4 percentage points to 6.9%. The decline in employment was driven largely by both the economic situation and supply-side factors in the labour market, including a reduction in the working-age population and an overall contraction in labour supply. As economic activity picked up, labour-market conditions improved in 2025. In the second quarter of 2025, the number of employed persons increased by 0.8% (6 900 individuals) compared with the second quarter

and an overall contraction in labour supply. As economic activity picked up, labour-market conditions improved in 2025. In the second quarter of 2025, the number of employed persons increased by 0.8% (6 900 individuals) compared with the second quarter of 2024. The unemployment rate fell to 6.7% in the second quarter of 2025, 0.2 percentage po ints lower than in the corresponding quarter of 2024. Average monthly gross wages continued to rise. In 2024, the average net wage stood a t EUR1221, representing 72.4% of the gross wage, and increased by 9% year-on-year, outpacing the rise in consumer prices. Real net wage growth, adjusted for inflation, amounted to 7.6%. 5

FINANCING SMES AND ENTREPRENEURS 2026: LATVIA © OECD 2026

In the second quarter of 2025, the national average gross monthly wage was EUR1 808. Com pared with the second quarter of 2024, average monthly remuneration rose by EUR 137, or 8.2%. Wage growth was somewhat stronger in the private sector. Real net wage growth, adjusted for inflation, stood at 6.6%. SMEs in the national economy According to Eurostat data, in 2023, there were 146 256 economically active individual merchants and commercial companies in Latvia. 99.8% of these firms were SMEs and 94.1% of SMEs were micro-sized. Only 0.2% of firms in Latvia in 2023 were large firms (see Table 2.) Table 2. Distribution of firms in Latvia, 2023 Class size Latvia Number of enterprises Number of persons employed Value added Latvia EU-27 (excl. UK) Latvia EU-27 (excl. UK) Latvia EU-27 (excl. UK) Number % share % share Number % share % share Billion EUR % share % share

Latvia EU-27 (excl. UK) Latvia EU-27 (excl. UK) Latvia EU-27 (excl. UK) Number % share % share Number % share % share Billion EUR % share % share Micro 137,385 93.9 94.4 223,557 33.1 29.8 4.8 21.9 19.5 Small 7118 4.9 4.8 144,749 21.4 18.5 4.6 21.1 15.5 Medium 1511 1.0 0.8 148,042 21.9 15.2 5.3 24.2 16.0

SMEs 146,014 99.8 99.8 516,348 76.5 63.5 14.7 67.3 50.9

Large 242 0.2 0.2 158,781 23.5 36.5 7.1 32.7 49.1 Total 146,256 100 100 516,348 100 100 21.8 100 100

Note: The most recent available data on the distribution of firms pertains to 2023.

Data: Eurostat, SBS – main indicators In 2023, there were approximately 146,014 SMEs operating in Latvia, with the vast majority of these ( 137 385) being micro-sized enterprises that employed between zero and nine people. Additionally, there were around 7118 small businesses, which had between 10 and 49 employees, and 1 450 medi um-sized businesses.

In 2023, there were approximately 516 348 people employed by SMEs in Latvia. Micro-sized enterprises, who employ between zero and nine people, employed 223,557 people in this year, small-sized businesses (10-49 employees) employed 144 749 people, while medium ones (50-249 employees) employed around 148 042 people.

who employ between zero and nine people, employed 223,557 people in this year, small-sized businesses (10-49 employees) employed 144 749 people, while medium ones (50-249 employees) employed around 148 042 people. In the Latvian ‘non -financial business economy’, SMEs account for 69.8% of value-added and 76.2% of employment, significantly higher than the respective EU averages of 53.1% and 65%. SME lending Latvia ranks 16th in the EIF SME Access to finance index (August 2023 update), marking a significant sixplace improvement compared to 22nd place in 2021. This enhanced performance is largely attributable to a strong score in the “Equity” subindex , where Latvia ranks 5th. The capitalization of SMEs has been positively influenced by the 2018 Enterprise Income Tax Law reform, which encouraged profit reinvestment. Data from recent years indicate a significant increase in activity regarding new SME lending. In 2024, the volume of new loans issued to the SME sector reached EUR 1 690 million, representing both a short-term6 

FINANCING SMES AND ENTREPRENEURS 2026: LATVIA © OECD 2026

increase compared to 2023 and a long-term rise – for instance, in 2020, this figure was only EUR 855 million. Furthermore, the role of SMEs in the total credit flow maintains a high share, as they accounted for 75.28% of all newly issued business loans in the country in 2024. An analysis of the loan portfolio structure reveals a continuing trend in favor of long-term financing. In 2024, the outstanding balance of long-term loans to SMEs reached EUR 3 636 million, continuing the upward trajectory observed since 2021. Meanwhile, the share of short-term loans has rema ined steady over the past four years, reaching a 21.3% share in 2024, with an outstanding short-term credit ba lance of EUR 984 million.

trajectory observed since 2021. Meanwhile, the share of short-term loans has rema ined steady over the past four years, reaching a 21.3% share in 2024, with an outstanding short-term credit ba lance of EUR 984 million. Financing costs have risen significantly in recent years, driven both by the gene ral increase in interest rates across Europe and the fact that small and medium-sized banks, which offer higher interest rates than large banks, have begun to show substantial activity in the lending market. The average interest rate for SME loans in Latvia reached 7.46% in 2024, which is considerably higher than the 4.0% recorded in 2022. Additionally, the interest rate spread between SMEs and large enterprises increased to 1.41% in 2024, indicating tighter conditions specifically for smaller-scale businesses. However, despite more expensive credit resources, portfolio quality remains at a historical ly high level. The share of non-performing loans in the SME sector dropped to a record low of 0.51% in 2024, reflecting very high payment discipline. The number of corporate insolvency proceedings also remains relatively low, reaching 265 cases in 2023. In addition to traditional bank loans, Latvian SMEs are increasingly utiliz ing alternative types of financing. The volume of leasing and hire purchase agreements grew to EUR 1 122 million in 2024, while the venture and growth capital market has experienced the most rapid growth, increasing from EUR 38 million in 2015 to EUR 278.4 million in 2024. These data confirm the diversification of Latvia's business environment and its ability to attract various types of capital for growth. Credit conditions The total volume of interest payments by NFCs reached its peak in mid-2024 and subsequently declined in line with the fall in EURIBOR. Nevertheless, the incorporation of lower reference rate s into loan pricing is occurring slowly and gradually. The overall debt-servicing capacity of NF Cs weakened slightly in 2024 but remained at a sound level: earnings before interest and taxes were 6.9 times greater than i nterest

in line with the fall in EURIBOR. Nevertheless, the incorporation of lower reference rate s into loan pricing is occurring slowly and gradually. The overall debt-servicing capacity of NF Cs weakened slightly in 2024 but remained at a sound level: earnings before interest and taxes were 6.9 times greater than i nterest payments. Debt-servicing capacity in the transport and storage sector deteriorated ma rkedly, reaching a very low level (1.59 times), whereas in the real estate operations sector the ratio improved marginally alongside rising profitability (2.59 times). It should be noted that, according to a detailed analysis of the financial position of borrowers in the transport sector, their solvency is b etter than the sector average. In the remaining sectors where the interest coverage ratio declined, debt-servicing capaci ty continues to be adequate. In 2025, the debt-servicing burden is expected to ease further due to the gradual i ncorporation of lower reference rates. The dynamics of lending to non-financial corporation (NFCs) are still driven by the interaction between supply and demand factors. Lending policies of the largest credit institutions are still conservative concerning NFCs. Weak competition in the market of lending to SMEs is one of the factors that affect lending conditions (e.g. loan maturities, prices, collateral requirements). Although NFC lending is currently being significantly driven by medium-sized and small banks, the majority of which are domestically owned. Although the loans issued by these banks still account for a relatively smal l share of the banking sector’s total domestic NFC credit portfolio (20% as of March 2025), their contribution to lending growth is presently greater than that of the five largest banks, all of which are foreign-owned. In 2024, the interest rate for SMEs stood at 7.46%, approximately 20% higher than in 2023, when the rate was 6.21%. In contrast, the interest rate for large firms in 2024 was 6.05%, reflecting a 3.6% increase 7

In 2024, the interest rate for SMEs stood at 7.46%, approximately 20% higher than in 2023, when the rate was 6.21%. In contrast, the interest rate for large firms in 2024 was 6.05%, reflecting a 3.6% increase 7

FINANCING SMES AND ENTREPRENEURS 2026: LATVIA © OECD 2026

compared to 2023, when it stood at 5.84%. The interest rate spread in 2024 was 1.4 1 percentage points, compared to 0.37 percentage points in 2023. Consequently, the spread widened by 281.08%. T his increase in interest rates for SMEs is primarily attributable to the active participation in lending by mediumand large-sized domestic banks, which typically apply higher rates than t heir major international counterparts. Overall, the situation should be regarded positively, as the involvement of these mid-tier and smaller banks has significantly enhanced access to financing for small and medi um-sized enterprises, thereby supporting their growth and competitiveness. Alternative sources of SME financing The Latvian government, in pursuit of the initiative launched in 2023 to es tablish and finance the Baltic Small and Medium-Sized Enterprise Initial Public Offering Fund, announced on 2 9 September 2025 that ALTUM, in partnership with the Lithuanian development bank ILTE, had launched the B altic Capital Markets Acceleration Fund “1 Asset Management” – the first such regional initiative. With an initial value exceeding €50 million, the fund will provide long-term support to Baltic companies preparing for initial public offerings (IPOs) and will help accelerate the development of local capital markets. The initiative is further bolstered by private-sector participation, including investments from the asset management firm “1 Asset Management” and the financial advisory firm “Baltic Partners”. Latvian SMEs also have access to the BaltCap Growth Fund, which invests in fast-growing companies with proven and profitable business models. The BaltCap Growth Fund commits up to EUR 10 million to support compa ny expansion through

Management” and the financial advisory firm “Baltic Partners”. Latvian SMEs also have access to the BaltCap Growth Fund, which invests in fast-growing companies with proven and profitable business models. The BaltCap Growth Fund commits up to EUR 10 million to support compa ny expansion through measures such as increasing production capacity, entering new markets, or acquiring competitors, while tailoring solutions to the specific needs of each enterprise. Of course, business angels represent one of the sources of financing for SMEs. In Latvia, several investor associations, forums, and organisations are active, such as the Latvian Private Investors A ssociation, the Latvian Business Angel Network, and various contact exchanges, during which those seeking funding present their business ideas and endeavour to persuade potential investors of the project's viability and anticipated returns. In Latvia, leasing and factoring have established themselves as standard financial ins truments, widely offered by both major commercial banks and a range of non-bank lenders. Leasing is traditionally used for the acquisition of transport and equipment, and data indicate moderate but steady growth in recent years: following a decline in 2021 (EUR 874 million), the volume of leasing and hire pu rchases has increased, reaching EUR 1 122 million in 2024. Meanwhile, factoring, which serves cash fl ow management and the acceleration of invoice payments, has shown positive dynamics after slight fl uctuations during the pandemic period, reaching EUR 194 million in 2024. Although both services are essential for business support, the volume of the leasing market in Latvia continues to significantly exceed that of the factoring market, reflecting a corporate focus on long-term investment in fixed assets. Other indicators In 2024, 9320 new companies were registered in Latvia - 548 more than in 2023. In 7843 companies were liquidated in 2023, then in 2024, 9432 companies were liquidated, which is 20.3% more. Government policy response On the policy side, substantial progress has been made to facilitate SME access to finance. In 2014, Altum

liquidated in 2023, then in 2024, 9432 companies were liquidated, which is 20.3% more. Government policy response On the policy side, substantial progress has been made to facilitate SME access to finance. In 2014, Altum was established. It is a one-stop-shop national development finance institution where SM Es can apply for European, national and local aid in the form of financial instruments (loans, guarantees, equity instruments,8 

FINANCING SMES AND ENTREPRENEURS 2026: LATVIA © OECD 2026

etc.). Latvia has been very active in using available EU Structural Funds to prevent market failures in the financial sector and ensure that SMEs get the required investments so they can grow. A variety of financial instruments have been created to facilitate the availability of financial resou rces in all stages of business development, especially for starting a business. The financial instruments implemented by the Altum (directly and indirectly): • Equity instruments: pre-seed, seed and start-up capital, venture capital, and expansion capit al. • Quasi-equity instruments: mezzanine loans. • Debt instruments: guarantees (loan guarantees, short-term export credit guarantees), startup loans, microloans, SME loans, FRS loans, loans for rural development/farmers. Credit guarantees Credit guarantees support serves as additional collateral for entrepreneurs’ bank obligations. Guarantees are issued to companies that lack sufficient collateral to receive a loan or to obtain financing in the required amount but have a transparent financial history and positive creditworthiness. The guarantee covers up to 80% of the principal loan amount. The support program includes ERDF funding from the EU funds 2014 –2020 programming period amounting to EUR 49.8 million for the support of small and medium-sized enterprises, and repaid funding from previous EU fund periods amounting to EUR 3.51 million for the support of large enterprises. At the same time, additional funding of EUR 29.6 million is planned for the issuance of guarantees from 2024 under the EU Cohesion Policy Program for 2021–2027.

from previous EU fund periods amounting to EUR 3.51 million for the support of large enterprises. At the same time, additional funding of EUR 29.6 million is planned for the issuance of guarantees from 2024 under the EU Cohesion Policy Program for 2021–2027. The program has been operating since June 2016. From 2024 until October 31, 2025, 440 guarantees have been issued in the amount of EUR 24.7 million. Portfolio guarantees were developed in 2017 to improve the availability of financial resources for SMEs in Latvia. They were intended to contribute to the creation of new companies, expand exis ting activities and increase lending rates (average amount of guarantees issued EUR 6 to EUR 10 million per yea r). Guarantees provide business owners with the opportunity to obtain investment and worki ng capital loans as well as financial leasing with a term from one to 10 years, in amounts up to EUR 250,000. For issuing guarantees, EUR 14.2 million of repaid public funding is available. In 20 25, the program supported 125 companies for a total amount of EUR 1.37 million. In 2025, Latvia developed a unified guarantee methodology, submitted for approval to the European Commission, which enables the extension of the guarantee instrument to mid-cap and large enterpris es. Export credit guarantees The main target of export credit guarantees is to reduce political and commercial ri sks related to export transactions. Due to the uncertain economic conditio