Survey: Over Half of Latvians See Limited Business Opportunities in Rural Areas

A survey of Latvian residents on entrepreneurship prospects in rural areas found that 51% of respondents believe opportunities exist but are limited. Another 30% think developing a business in the countryside is very difficult, while 12% are convinced the opportunities are sufficiently broad. The results were commented on by Armands Alksnis, head of the Zemgale region at ALTUM, a state development finance institution that provides loans and support to businesses.

A contradictory picture

Alksnis points to a contradiction in the answers. More than half of residents believe even a small rural company can succeed, yet only one in four rates rural business opportunities as good overall. In his view, alongside objective challenges there remains a cautious perception of the countryside as a place to build a business.

On more specific questions, assessments were more optimistic. Some 55% agreed that a small rural company can be successful and profitable, while 22% disagreed. Half of respondents (50%) said that in the countryside one can not only survive but also grow a business. A total of 43% agreed that success does not require large land areas, while 27% disagreed. The statement that young people in rural areas have opportunities to develop a business was supported by 39% and rejected by 33%.

Most promising sectors

Asked which sectors will offer the best opportunities in the countryside over the next ten years, respondents most often named tourism and hospitality (26%), food production and processing (15%), agriculture (14%) and wood processing (10%). This suggests that rural business potential is no longer linked solely to traditional farming.

ALTUM's new programme

To encourage rural entrepreneurship, ALTUM has launched the programme “Small loans in rural areas with a capital rebate”. It is intended for young farmers up to 40 years old who are setting up a farm or took one over in the past five years, as well as farmers and food producers developing new lines of activity. A single project can receive a loan of up to €250,000.

For the first time in this type of financing, a capital rebate is available: after the project is completed and certain performance results are achieved, up to 50% of the loan principal can be written off, not exceeding €100,000. The programme's total funding is €27 million.