Minister of Entrepreneurship and Information Technology Rene Tammist (SDE), members of the Estonian Banking Association (EBA), and leaders of Kredex and the Rural Development Foundation (MES) met on Friday to discuss opportunities for improving the financing opportunities of business in rural areas.
"At today's roundtable, we tried to determine how state support measures have worked to date, and whether it would be possible through joint action to further improve financing opportunities and make credit available outside of major centres as well," Mr Tammist said in a Ministry of Economic Affairs and Communications press release.
The parties' goal at the meeting was to figure out ways to improve opportunities for raising credit for the promotion of business and the acquisition and renovation of real estate in rural areas.
Financing the acquisition of real estate in rural areas is complicated as a result of difficulty selling collateral and the small size of the potential market. In Estonia's biggest cities, meanwhile, business activity is more intense, and the potential sale of property simpler.
The average size of a loan for the acquisition of a property outside of Tallinn, Tartu and Pärnu is significantly lower than the nationwide average, indicating these regions' lower capacity to raise money.
Possible solutions explored at the meeting on Friday included increasing the volume of underwriting by the state, raising the amount of support for the renovation of flat blocks and the issuance of direct loans by Kredex or the Rural Development Foundation to entrepreneurs and flat associations in need of such support.
Editor: Aili Vahtla