SME Bank gets EU-backing to bring up to €100 million financing to Lithuanian SMEs

• Lithuanian UAB SME Bank signs guarantee agreements with European Investment Fund under the “European Guarantee Fund” (EGF), to channel financing to Lithuanian SMEs.
• EGF-guarantee will support up to €100 million in new financing to over 500 Lithuanian SMEs dealing with the economic fall-out of the COVID-pandemic.
• The EGF is part of the €540 billion EU rescue package in the wake of the corona outbreak.

In order to support small and medium sized businesses in Lithuania, who continue to be under strain from restrictions imposed to counter the COVID-19 pandemic, Lithuanian financial intermediary UAB SME Bank has signed a guarantee agreement with the European Investment Fund. 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-pandemic.

With the EGF support, The European Investment Fund will provide a 70% guarantee on a portfolio of new lending totalling 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 channelling guarantees to both traditional and alternative finance providers, the EGF-guarantee helps to make available new, advantageous lending to Lithuanian SMEs.

"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” says Mantvydas Štareika, CEO of SME Bank.

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.”

Vaida Česnulevičiūtė, Vice-Minister of Finance of the Republic of Lithuania, said: “The COVID-19 pandemic continues to negatively impact businesses throughout the EU and globally. The European Guarantee Fund, as the EIB Group's key crisis response instrument, has proved its effectiveness in terms of increasing firms' access to finance, especially SMEs, thus contributing to economic recovery and fostering sustainable growth. We regard the guarantee extended to UAB „SME Bank" under the European Guarantee Fund as an important instrument in enhancing Lithuanian SMEs' possibilities to receive the funding they need.”

Background information:

The European Investment Fund (EIF) is part of the European Investment Bank Group. Its central mission is to support Europe's micro, small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment.

The European Guarantee Fund (EGF) was set up by the EIB Group with contributions from Lithuania and other EU Member States to shield companies suffering from the COVID-19 crisis. Using nearly €25 billion in guarantees, the EGF allows the EIB and the EIF to quickly make loans, guarantees, asset-backed securities, equity and other financial instruments available to mostly small and medium-sized enterprises. The EGF is part of the European Union’s recovery package aiming to provide a total of €540 billion to boost those parts of the EU economy that have been hit the worst.

The first neobank with Lithuanian capital, SME Bank, focuses on small and medium-sized enterprises, which provide not only digital day-to-day banking services, but also borrowing products. SME Bank, licenced by the European Central Bank, started its operations in June 2021, and banking services are available in all three Baltic countries.

Press contacts:

EIB Group: Tim Smit, Tel: +352 4379 89076, +352 691 286423, t.smit@eib.org – Twitter: @EIF_EU
Website: www.eif.org - Press Office: +352 4379 21000 – press@eib.org

UAB SME Bank: Rūta Knyvienė ruta.knyviene@smebank.lt  / +370 (683) 70522