SEB Bank Executive: Latvia's Growth Held Back by Indecision, Not Lack of Capital
In an opinion piece for the magazine Ir, SEB bank management board member Arnis Škapars argues that capital availability is no longer Latvia's main obstacle; willingness to invest and decide is. He calls for greater use of private capital, including in defence.
Latvia's economy is currently constrained less by a shortage of money than by insufficient readiness to invest and make decisions. This is the view expressed on 21 October in the opinion section of the Latvian magazine Ir by Arnis Škapars, a member of the management board of SEB bank. He stresses that while Europe is rapidly increasing defence spending, the key task is turning capital into growth.
Business sentiment is shifting
Škapars notes that Latvian entrepreneurs have operated in difficult conditions in recent years. Some owners face generational change, and uncertainty about demand, past crises and geopolitical tension also weigh on decisions. Even so, he says, businesses increasingly think about growth rather than simply preserving stability.
As evidence, he cites SEB's lending portfolio for small and medium-sized enterprises, which has grown by an average of 8% a year since 2022, faster than the Latvian economy. In the first half of 2026, demand for financing was 11% higher than in the same period last year.
The defence sector example
Private companies in defence and dual-use technologies are growing rapidly, and the main challenge is often financing that growth. The author names the companies Origin Robotics and DK Unity, as well as an unnamed firm that raised its turnover from one million to 24 million euros in a short time. At that stage, funding the fulfilment of signed export contracts is crucial.
Different types of financing needed
Škapars argues that banks cannot be the only source of funding. Traditional loans suit companies with a stable business model, while venture capital is more appropriate at an early stage and, he says, is harder to obtain in Latvia than in neighbouring countries. SEB offers Venture Debt financing to fast-growing Baltic companies. He also points out that Latvia's private-sector debt level remains relatively low.
The author urges the state to ensure fast, predictable decision-making on procurement, permits and infrastructure projects, as this could become a competitive advantage. In his view, security cannot be funded in the long term by the defence budget alone; it requires an economy that grows and invests.
