Restricting lending would further weaken the economy


According to Aron Jäger, B2B Financing Business Manager at Holm Bank, business customers of the bank have not put their development activities on hold and the bank does not plan to restrict lending activities. However, the bank has put more emphasis on supporting its customers in analysing investment perspectives, so that investment decisions would be well thought out and companies would not have trouble with loan repayments.

‘Banks have the power to keep the economy running and give companies hope for a better future in troubled times. Together with our clients, we thoroughly analyse their loan needs and try to find a flexible solution that ensures that the company is able to repay the loan without running into difficulties as a result of the loan,’ said Jäger.

According to him, Holm developed a limit loan solution to support companies, which allows companies to manage their cash flow more flexibly, saving interest expenses and providing security to cover deficits in economic activities. ‘As businesses need working capital to survive the current situation, we try to give our customers the flexibility that helps them overcome cash flow deficits,’ said Jäger.

The business customers of the Estonian capital based Holm Bank are mostly small companies that have up to five employees and operate in the local market, buy their raw materials and other necessary materials from Estonia, and provide services directly to the local consumer. According to Holm’s representative, the more complicated the market situation, the more likely it is that such small companies will be left hanging out to dry by big banks, because their assets are essentially only their employees and expertise.

However, a business loan taken out to expand the machinery, train employees, or for other purposes allows them to expand their successful operations or improve the quality of service. ‘We are doing our best to enable our customers to continue their daily activities and expand their business with the help of a well-considered loan. ‘We invest significantly more time than usual in analysing development plans with the client and helping them make informed decisions – we consider the worst-case scenarios and discuss whether today is the right time to make an investment or postpone the investment,’ said Jäger.

According to Jäger, the risk that the crisis will deepen is addressed with all customers. ‘A bank that cares about its customers supports its customers in overcoming difficult circumstances – the viability of our customers is also critical for us. If we see that an investment will benefit the customer’s capabilities in the long run and help them recover faster from the setbacks caused by the emergency situation, then we want to find a way to improve their prospects,’ added Jäger.

According to Jäger, the government’s plan to boost the activities and restore the confidence of companies with various loans, guarantees, and compensations is very commendable. This means that customers of Holm Bank will receive significantly more support in the coming months from, for example, the wider range of services provided by Kredex and the Rural Development Foundation (MES) which aim to boost business in areas away from major centres of attraction.

‘This opportunity is already used by many of our customers, from bakers and metalworkers to construction companies and large suppliers of agricultural machinery. The additional capitalisation from these sources gives local companies a lot of flexibility and encourages activity in the market,’ explained Holm’s representative.

Holm Bank AS is a bank based on Estonian capital. Holm is the first credit institution in Estonia to be licensed by the European Central Bank. In addition to business and limit loans, Holm’s products also include deposits and hire-purchases, consumer loans, and credit cards which have been on the market under the Liisi brand for 25 years.

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