"Each crisis and its causes are different, so it is not right to compare them. Similarly, not every economic downturn is a crisis – in recent years, Estonia has rather experienced an economic downturn," says Viljar Lillemägi, Head of Business Banking and Leasing at Estonia’s own Holm Bank. According to him, even the most painful economic downturn gives a push and a signal to reassess business and find new opportunities.
Lillemägi acknowledges that last year was challenging for the Estonian economy: rapidly rising inflation peaked, interest rates increased, prices went up, and wage pressure continued. "At the same time, every downturn provides an opportunity for growth, reassessment of activities, and new directions for development. Currently, Euribor has started to decline and will likely continue to do so, which is a positive trend for both businesses and individuals," explains Lillemägi.
As a result, Lillemägi expects capital inflow to Estonia to activate, and investor interest in us to rise again. "A recent positive development is that the Swedish central bank lowered interest rates. This has a direct impact on exports: since Sweden is a significant export partner for us, this provides business opportunities for Estonian companies," he highlights.
Entering the Business Client Sector Successfully
Holm Bank aims to help Estonian companies grow, develop, and expand into foreign markets. Celebrating its fifth year of operation as a bank this April, Holm offers flexible and well-thought-out financing solutions and the best interest rates for deposits. The bank entered the business client segment more robustly only two years ago, establishing a strategy, expanding the team, and defining client segments.
"We took a significant step towards medium-sized companies, offering them long-term partnerships and financing ranging from €100,000 to €2,000,000. Our specialists take time to address each inquiry, as clients' needs vary. We adapt to market demand and develop our products according to market bottlenecks," Lillemägi explains.
In 2023, Holm Bank established a leasing department focusing on financing the acquisition of machinery and production equipment for business clients. Although the bank are still at the beginning of their journey, Lillemägi is pleased to note that each month the company is one step closer to its goal – to make clients realise that Holm, a bank based on Estonian caplitab, is a reliable business partner. "We want to be partners with diligent Estonian entrepreneurs, from juice production and agriculture to real estate and green energy. Our goal is to support domestic entrepreneurship so that Estonian entrepreneurs do not have to strive for growth and reach foreign markets alone, without capital."
He provides an example of how Holm Bank supported the financing of two accommodation establishments outside Harju County to promote tourism development outside Tallinn. One successful investment took place in Central Estonia, and the other near the Latvian border. The bank has also financed agricultural companies in purchasing equipment and farmland and provided loans for spring work to support enterprising farmers working in rural areas. For instance, the bank provided a credit limit loan, which functions as the company's overdraft, to a company that wanted to participate in a state tender for purchasing wood raw material but lacked the financial means for immediate volume purchases.
"I emphasize once again that finding common ground with clients and partners, taking a step towards the client, regardless of their size is more important than the product range. The client wants personalization, and we have the capability to communicate with the client, visit their business on-site, listen to their thoughts, growth and development plans, and come up with solutions together," says Lillemägi. "In addition to Excel spreadsheets, we try to look into people, assess the feasibility and perspective of business plans. Our client feels that Holm Bank is with them and will not leave them alone with their troubles!"
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