As a result, much needed financing will become available to small and micro-enterprises in Lithuania through at least 320 new transactions for a maximum loan amount of €25.000. Credits under this agreement will be provided to businesses with no more than 9 employees and an annual turnover not exceeding €2 million. The loans under this guarantee will have a 0.5% lower interest rate compared to the standard rates, and the possible maturity term will range from 3 to 60 months.

Strengthening business in the context of COVID-19 challenges

The majority of companies in Lithuania are micro, small and medium-sized businesses, making additional funds almost vital to ensure streamlined operations and increasing business profitability. The COVID-19 pandemic and the economic downturn it has caused, have exacerbated the funding of credit institutions, making it difficult for small businesses to get the appropriate funding. The EaSI-guarantee managed by the EIF is a means to increase access to financing for business start-ups or development of small enterprises. The operation follows a previous collaboration with LCCU last year.

According to Mindaugas Vijūnas, chief executive officer and chairman of the Board of the LCCU, the relevance of this guarantee facility has not only been growing in the context of the COVID-19 crisis, but may also become one of the ways to guarantee corporate liquidity in the post-pandemic period: "The EaSI guarantee facility will simplify access to finance for SMEs in cases where the company has no sufficient collateral. Companies can use credit for both working capital and business development. We hope that the EIF guarantee provided under the EaSI programme will become a significant contribution to the growth and survival of the country's small business sector in a period, which is difficult for everyone.”

Alain Godard, Chief Executive of the EIF, added: “Especially in the current economic climate, the traditional role of the EIF in promoting access to finance for small companies becomes all the more important. Companies everywhere are dealing with the economic fallout of the pandemic, and Lithuania is no exception. We’re glad to partner with the LCCU to make sure that very small and local companies can still benefit from European financing programmes.”

European Commissioner for Jobs and Social Rights, Nicolas Schmit, said: “Small businesses need access to financing to start up or continue their operations as well as to create and maintain jobs, especially in these challenging times. With support from the EU Programme for Employment and Social Innovation and the EIF, the Lithuanian Central Credit Union will be able to launch an additional €8 million microcredit programme specifically tailored to the financing needs of small businesses in Lithuania.”

Financing under favourable terms

During the year 2020 Credit unions of the LCCU granted 396 loans to micro, small and medium-sized enterprises totalling almost 40 million euro. Thus, joining the EaSI guarantee facility justifies one of the priority areas for credit unions – providing credit for small business.

"Credit unions of the LCCU are consistently looking for new ways to offer financing solutions to the small business sector under the most favourable terms. We are pleased to develop a partnership with the EIF, which has made a significant contribution to fostering a sustainable Lithuanian small business sector", adds Rūtenis Šukevičius, director of the LCCU Treasury Department.