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EBRD promotes growth of small and medium-sized enterprises in Lithuania
Siauliu Bankas, a medium-sized bank in Lithuania, will receive a €5 million revolving credit line from the European Bank for Reconstruction and Development (EBRD) to boost the country’s small and medium-sized enterprises (SMEs). Provided under the SME Finance Facility signed by the EBRD and the European Commission in April 1999, this is the first such credit line for a Lithuanian bank.
Siauliu Bankas will also benefit from substantial technical co-operation funding aimed at developing a sustainable SME lending programme and a grant to help cover the costs of developing this programme. Both are being funded by the European Commission.
"The credit line to Siauliu Bankas brings Lithuania into the EBRD’s SME financing programme in the 10 EU accession countries," said Kurt Geiger, the EBRD’s Director for Bank Lending. "Under this facility with the EU, which was implemented in the second half of last year, EBRD financing has been provided to banks in Bulgaria, Latvia, Poland, Romania, Slovenia and now Lithuania for on-lending to SMEs. Other countries are expected to be included by the end of this year."
"The long-term loan from EBRD will enable Siauliu Bankas to build its medium and long-term assets, and broaden its client base in the region. By providing small loans to SMEs, enhanced by technical assistance from the EU, we are helping to develop our clients and the local economy, which is good for everyone," said Algirdas Butkus, Chairman of the Board of Siauliu Bankas.
With a five-year maturity, the credit line will support the growth of the bank and will enable it to build a portfolio of good-quality medium-term loan assets. The proceeds of the loan will be used by the bank to provide micro loans (up to €30,000) and small loans (up to €125,000) to qualifying entrepreneurs and SMEs. EU Phare will finance a technical assistance programme for 18 months that will ensure effective implementation of the credit line, including training and technical support to Siauliu Bankas as it builds its SME lending business.
Founded in 1991, Siauliu Bankas is owned by a variety of financial investors, including Vilniaus Bankas as its largest shareholder, and private individuals. It has operated as a universal commercial bank since 1994. Siauliu Bankas provides commercial banking services to corporate customers, municipalities and private individuals. Its headquarters are in the town of Siauliai in western Lithuania and it has nine branches throughout the country. In 1999 Siauliu Bankas ranked number seven in Lithuania by total equity and total assets. At the end of 1999, its total assets amounted to €45 million and its net profit was €514,000.
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