Lithuanian financial intermediary SME Bank has signed a guarantee agreement with the European Investment Fund (EIF) to support local small and medium sized businesses (SMEs).

The agreement is made possible under the “European Guarantee Fund”, an initiative of the EIB Group and participating EU member states to help European businesses come through the difficult times caused by the COVID-19 pandemic.

The fund is part of the €540 billion EU rescue package in the wake of the corona outbreak.

With the EGF support, EIF will provide a 70% guarantee on a portfolio of new lending totaling up to €100 million by SME Bank, while also making it possible for the financial institution to offer enhanced conditions to its borrowers.

The funding comes at a moment when many European SMEs look for support to deal with the continuing economic fallout of the COVID-19 pandemic.

By channeling guarantees to both traditional and alternative finance providers, the EGF guarantee helps to make available new, advantageous lending to Lithuanian SMEs.

Mantvydas Štareika, CEO of SME Bank said,

“By working with the EIF, we can now offer not only simple, clear pricing and fast solutions, but also better credit terms.

 

This agreement is an important event for all Lithuanian small and medium-sized enterprises, because with such a solid guarantee amount, we can properly contribute to the growth of many small and medium-sized enterprises in Lithuania”

Alain Godard, Chief Executive of the EIF added,

“The European Guarantee Fund was set up together with Member States to make available much needed extra, favourable financing to SMEs, who are the engines of our economies, to grow their way out of this crisis.

 

We’re glad to partner with UAB SME Bank to bring EU-financing to final beneficiaries, showing that European financing can really make a difference on the ground.”