Banks' Attitude to Financing Latvian Defence Firms Has Improved, Says DAIF Latvija Head
Egle, head of the industry organisation DAIF Latvija, says banks now treat defence companies' financing requests more favourably. Producers of purely military goods, however, often still have to seek funding abroad.
Latvian banks' attitude towards financing defence industry companies has improved, according to Egle, head of the industry organisation "DAIF Latvija". This matters because Latvia's defence industry needs funding, yet some manufacturers still cannot get it from domestic banks.
What changed the attitude
Egle explained that most of the practical work to change attitudes was done while Andris Sprūds (P) was still defence minister. It took place at the Ministry of Defence with the support of the Bank of Latvia. In addition, "DAIF Latvija" is in constant talks with the Finance Latvia Association, as well as with individual banks.
Where funding remains a problem
At the same time, Egle acknowledged that in some cases entirely military goods are being produced. The industry then has to look for funding abroad, where there are banks with experience of working with military manufacturers and which are not afraid of financing the production of military goods.
Asked whether the reason is that banks do not finance military production on principle, or simply lack experience, Egle said both apply. For anti-personnel mines, she said, it is unambiguously a bank policy.
Which banks engage with the industry
Egle noted that the banks most active in communicating with the defence industry are so-called industrial banks, rather than the universal banks known as the big four. The biggest challenge for industrial banks is the amount of funding they can devote to products that are, in a sense, high-risk. "As a result, we are forced to look for funding abroad as well," Egle said.
