Trends, Sources and Amounts of Financing for Micro-enterprises in Latvia

Abstract

The current article examines the tendencies, amounts and sources of financing for the whole population of micro-enterprises (MEs) in one country. The changes in the amounts and the structure of ME financing with regard to the three main sources – bank loans, leasing and factoring – are analysed and compared with the respective data on all enterprises in Latvia in 2013 and 2014. The authors have established that in 2014 bank loans, leasing and factoring constituted about 89% of ME financing from formal external sources. In 2014, bank loans constituted about 67.5% of ME financing from external formal sources. The authors have proposed a hypothesis about the sensitivity of bank loans for MEs to negative macro-economic changes.