Ksenija Ijevleva, Biruta Sloka


With rapid growing of competitiveness in the Latvian commercial banking, and resemblance of services offered by banks, it has become significantly important that banks detect the information sources influencing the customer choice of banks of financial products. The relevant literature indicates that a great deal of research effort has been expended to investigate bank selection criteria for broad categories of customers. One promising segment, which, arguably, has not been given enough attention, is the households group.

Home loans products make the markets that had the huge increase before crisis. The great fall of interest rates along with the offering of new, more flexible and attractive products had led to an increase in demand relating to housing. Thus, most of Latvian banks paid great attention to home loans by promoting and advertising more and more competitive products within an environment that was based on offering the best services and suitable products for the client’s benefit.

The rates for the provision of mortgage products had been maintained at particularly high levels for the pre-crisis years with commercial banks having the leading role.

The financial crises in Latvia presented, that households took out risky loans that were pushed by lenders who didn’t care about the riskiness of these loans as they would be packaged and sold.

After the heavy fall in economy 2009 the Latvian commercial banks’ mortgage credit portfolios are more prudent and in 2011 the changes in credit politics should continue. According to the Worthington’s research the financial crisis and the subsequent distrust of the existing banks have created an opportunity for new competitors to enter the market for financial services. Organizations from outside banking could use their trusted brands, their stronger grasp of information technology and their stronger customer service ethos to potentially shake-up the provision of financial services and hence to take business away from the “traditional” players.

So all Latvian commercial banks should direct their marketing steps to reach customers’ trust. Banks cannot always have the lowest rate in market. Banks have to differentiate themselves and find new competitive advantages.

The required marketing policies formulation and implementation should be based on accurate information as the decisions based on inferior data might increase costs and reduce both the quality and quantity of banks’ home loan products.

Purpose – The purpose of this paper is to investigate households’ use of information sources of home loan obtaining and households’ attitude toward the possibility to obtain a home loan.

Methodology – A field survey of bank customers in Latvia was conducted using a structured questionnaire. The quantitative study draws data from 928 participants. The data were factor-analysed to determine the key dimensions.

Findings – The results show that there are three information sources’ key dimensions that households use for choosing of home loan providers.

An accurate appreciation of information sources may aid bank marketer in their attempts to deliver offerings, which will motivate households’ decisions.



home loans; marketing; commercial banks; information sources

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Print ISSN: 1822-8402
Online ISSN: 2335-8831