Management Theory and Studies for Rural Business and Infrastructure Development, Volume 30

Research of Private Sector Credit Development Factors and their Change Trends in Baltic States

Danutė Binkienė, Aušrinė Lakštutienė, Astrida Slavickienė
Kaunas College; Kaunas University of Technology; Aleksandras Stulginskis University


Credit market development is closely related to national and global economic stage. During the economic growth banks are very interested in loan provisions, otherwise when the economy is experiencing recession, banks seeking to protect themselves against potential losses, are tightening credit risk assessment and lending limits. Not always is possible to foresee adverse developments of the economy that why this theme is relevant, it is extremely important to know the factors that determine changes in the credit and which should be taken to provide further credit market developments. In the scientific literature these issues are fairly well analyzed, but very often scientists have different opinions. The problem is that the naming of certain factors and assessing their impact, are obtained very different results. Although the Baltic countries in the international space is conceived as a single region, but is lack of studies where were analyzed private sector’s credit factors and trends to the market not at one of the Baltic countries but all them together. These circumstances determined the objective of the study – to identify the factors that determine the extent of private sector credit and their trends in the Baltic countries. Research Methodology: systematic analysis of scientific literature, and logic comparative and mathematical statistical analysis. The results showed that the economic downturn affects the credit market development, the greatest impact on credit to the private sector market have following factors: GDP per inhabitant, inflation, unemployment, average monthly net earnings, the market interest rate (EURIBOR), deposits. Although in all the Baltic countries indicated close relationship between these factors, but the affecting strength of these factors in each country is different.

Keyword(s): credit market; private sector; factors; financial position

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Management Theory and Studies for Rural Business and Infrastructure Development eISSN 2345-0355

This journal is published under the terms of the Creative Commons Attribution-Noncommercial 3.0 Unported License. Responsible editor: Dr Audrius Gargasas.