EU backing for micro-lending in Lithuania
The EIF has signed a guarantee deal with Faktoro, allowing them to start a programme of micro-loans to small companies in Lithuania, as part of the EIB Group’s Covid-19 support measures, informed EIF.
- The guarantee of a portfolio of up to €6 million in micro-loans is backed by the European Union under EU programme for Employment and Social Innovation (EaSI).
- The financing is expected to support up to 330 transactions with small businesses, for a maximum loan amount of EUR 25,000.
With EU-backing, over 300 Lithuanian micro-enterprises are set to get access to finance through a guarantee deal between the European Investment Fund (EIF) and fintech company Faktoro. Known for its factoring services, the up to €6 million guarantee deal will allow Faktoro to start awarding working capital loans of up to EUR 25,000 to micro enterprises in Lithuania. The EIF-guarantee is supported under the EU programme for Employment and Social Innovation (EaSI).
Faktoro will use the EaSI guarantee to launch a new working capital lending product for micro-enterprises in start-up or development phase, and expects to serve around 330 clients. In the current difficult economic environment, the EIF will initially guarantee up to 90% of all transactions as part of its Covid-19 support measures. Apart from enhancing access to finance for micro-enterprises in Lithuania, the working capital loan offered will be essential in providing liquidity to companies during the Covid-19 economic recovery.
European Commissioner for Jobs and Social Rights, Nicolas Schmit, said: “Thanks to EU-backing by the EaSI Guarantee, this agreement between European Investment Fund and Faktoro will unlock access to finance for more than 300 small businesses in Lithuania. The ongoing Covid-19 crisis continues to hit hard many micro-enterprises across Europe. The Commission will continue to use all the tools at its disposal to protect workers and preserve jobs.”
“Small businesses have always been struggling with traditional bank finance, and the economic fallout of the Covid-19 pandemic can further deteriorate their access to finance,” said EIF Chief Executive Alain Godard “That is why we are glad to support microfinance in Lithuania through Faktoro, which focuses on the start-up segment. Since the Baltic countries are traditionally a hotbed for innovation, backing access to finance for tomorrow’s solutions is high on our priority list.”
“Firstly we are very happy and proud for the given trust from EIF to have the ability to finance micro and small enterprises that need help. Micro and small enterprises will now have the ability to receive loans in particularly flexible conditions, without additional collaterals. We expect that in this period of uncertainty and after, this facility will help Lithuanian companies to expand and create more jobs. ” said Algirdas Gutauskas, CEO of Faktoro.