MDOI › International Journal of Multidisciplinary Studies and Innovative Researchs › 110.0276/INT.2026.00250

Article

Regulation and innovation in digital finance: The transformation of Latvia’s banking sector

Ramona Rupeika Apoga, Janis Priede, Gundars Berzins, Elmars Kehris 2025 International Journal of Multidisciplinary Studies and Innovative Researchs

Access Resource Linked Document

Abstract

The Latvian banking sector presents a policy and institutional puzzle: it maintains high loan interest rates despite low loan-to-deposit ratios and limited lending activity within the European Union. Anchored in credit rationing theory, this study investigates the institutional, regulatory, and technological factors influencing credit allocation. The examination is based on semi-structured interviews conducted with 29 senior experts and decision-makers from regulatory authorities, government ministries, and commercial banks, all of whom play a direct role in influencing Latvia's financial sector. Thematic analysis reveals constraints associated with regulatory-induced risk aversion, structural barriers to lending, borrower opaqueness and informality, the role of the state in facilitating lending, fintech integration challenges, and banking sector transformation. The findings demonstrate how compliance-driven institutional behavior, limited competition, and information asymmetries contribute to restricted lending. This study contributes to digital finance literature by showing how regulatory frameworks and institutional context in small EU economies influence the diffusion of financial innovation and credit access.

Identifier Metadata

Identifier	110.0276/INT.2026.00250
Canonical	mdoi:110.0276/INT.2026.00250
Resolver URL	https://mdoi.org/110.0276/INT.2026.00250
Resource URL	Open resource
Document URL	Open document
Content Type	Article
Authors	Ramona Rupeika Apoga, Janis Priede, Gundars Berzins, Elmars Kehris
Year	2025
Depositor	International Journal of Multidisciplinary Studies and Innovative Researchs Organisation
Prefix	110.0276
Registered	June 22, 2026
Updated	June 22, 2026
Status	Active
Visibility	Public

Cite This Identifier

APA 7th Edition

Click to copy

MLA 9th Edition

Click to copy

Chicago 17th Edition

Click to copy

BibTeX

Click to copy

Persistent Identifier

mdoi:110.0276/INT.2026.00250

Click to copy

MDOI membership MDOI registry MDOI guidelines

About MDOI

MDOI identifiers are permanent and unique identifiers assigned to digital objects to ensure long-term access, tracking, and referencing.

MDOI provides a permanent identity for digital objects.
Each MDOI is unique and points to one specific resource.
The prefix, such as 110.XXXX, identifies the registrant.
The suffix identifies the exact digital object.
MDOI remains stable even when a website URL changes.
It helps prevent broken links in digital publishing.
It makes academic and digital resources easier to find and cite.
MDOI supports proper tracking and management of digital content.
It improves the credibility and visibility of published resources.
MDOI ensures digital objects remain accessible, traceable, and reliable over time.

Registered by International Journal of Multidisciplinary Studies and Innovative Researchs

Regulation and innovation in digital finance: The transformation of Latvia’s banking sector

Related Identifiers 6