Aleksis Orlovs, Girts Braslins


One of the leading driving forces of every state economy is small and medium enterprises (SME). In Latvia, SME accounts for 99.7% of the national industrial system, creating 70% of the national’ value added. The lack of sufficient capital and credit is often a major problem for the development of SME, particularly in their early growth stages. The main criterion and quality indicator of credit risk assessment is the borrower’s creditworthiness. Before issuing a loan, the checking of the borrower’s credibility and solvency is carried out. The assessment of the borrowers’ ability to pay, their creditworthiness at a definite moment must be connected with the ability to meet their liabilities in the future.

The objective of the paper is to provide analysis on the development of Latvian government supported SME clusters and test the author’s hypothesis about the dependence of a company creditworthiness on its membership in a SME cluster.

Persistent market fragmentation, weak industry-research linkages and insufficient cooperation indicate that clusters in Latvia do not always have the necessary critical mass and innovation capacity to face global competition sustainably and to be world-class. The creditworthiness measurement methodology applied by these the authors did not prove any correlation between the membership of a firm in a cluster and its credit risk decrease, apparently other financial indicators (value of assets, capital etc.) are more significant. Improvement of these indicators will decrease the credit risk of a firm more considerably than membership in cluster organizations.



Cluster; creditworthiness; cluster support policies; small and medium enterprises

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Print ISSN: 1822-6515
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