The EIF has signed a guarantee agreement with Nordea Bank, allowing the bank to provide up to EUR 50 million of new loans to Lithuanian small and medium-sized enterprises.

The agreement signed by the EIF and Nordea Bank brings a new instrument, the First Loss Portfolio Guarantee (“FLPG”) to the Lithuanian market. The product provides additional finance to SMEs and help to promote entrepreneurship. The guarantee is implemented under the JEREMIE(Joint European Resources for Micro to Medium Enterprises) initiative, financed from EU Structural Funds.

This instrument offers a new opportunity to a broad range of SMEs across Lithuania looking to invest or expand their business. Nordea Bank Lithuania will offer improved funding conditions to the businesses. As a direct result, the bank will be in a position to finance enterprises with insufficient collateral and reduce loan interest rate. The product will be available for SMEs starting from April.

Mr. Giedrius Voveris, Head of Corporate Banking Department at Nordea Bank Lithuania, says that the biggest need for funds to finance long-term investments is seen in the SME sector in particular. Quite often companies in this segment are considered to entail higher risks and lacking in collateral, while the cost of loans is quite high. Because of this, Nordea Bank Lithuania in cooperation with the EIF is offering the market a new, unique and so far the only financing solution available for companies, not involved in other EU structural aid programmes.

“The SME segment is one of the largest and most important to the Lithuanian economy. Nordea Bank has, therefore, been looking for quite a while for measures that would allow promoting this business. This solution has finally been found. We believe that these loans will be taken up by companies willing to expand their business, seeing that SMEs represent the driving force behind the Lithuanian economy. Hence we are endeavoring to provide even more acceleration to it” – said Mr Voveris.

Graham Cope, Head of the Baltic Region, at the European Investment Fund states, “This is the first transaction of its kind in Lithuania and enables Nordea Bank Lithuania to add significant value to its SME customers. It is also a further example of the innovative financing initiatives delivered by the JEREMIE Holding Fund that is managed by EIF for the benefit of Lithuanian business.”

About EIF

EIF's central mission is to support Europe's small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture capital and guarantees 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 EIF total net commitments to private equity funds amounted to EUR 4.5bn at the end 2010. With investments in over 320 funds, the EIF is a leading player in European venture due to the scale and the scope of its investments, especially in high-tech and early-stage segments. The EIF commitment in guarantees totalled EUR 15.2bn in over 180 operations, positioning it as a major European SME guarantees actor and a leading micro-finance guarantor.

About Nordea Bank Lithuania

Nordea is the leading financial services group in the Nordic and Baltic region. Nordea has around 11 million customers, approx. 1,400 branch offices, a leading net banking position and a total market capitalisation of EUR 36 billion. The Nordea share is listed on the NASDAQ OMX Nordic Exchange in Stockholm, Helsinki and Copenhagen.

The group entered Lithuanian market in 2000. Nordea Bank Lithuania is now the 4th biggest banking institution and is one of the most rapidly growing banks in Lithuania providing all main banking services to private and corporate customers. 2010 was a successful year for Nordea Bank Lithuania: the total assets of the Lithuanian branch reached 8,3 billion litas, net profit before was 33.6 billion litas. Nordea Bank Lithuania has 21 branch offices situated in Vilnius, Kaunas, Klaipėda, Panevėžys and Šiauliai. The bank has 350 employees.

About JEREMIE

JEREMIE(Joint European Resources for Micro to Medium Enterprises) is a joint initiative launched by the European Commission (DG Regional Policy) and the European Investment Bank group to improve access to finance for SMEs in the EU within the Structural Funds framework for the period 2007-2013. JEREMIE enables the EU Member States and Regions to put money from the structural funds and also national resources into holding funds that can finance SMEs in a flexible and innovative way. The initiative aims at developing and fostering the role of entrepreneurship within the EU in order to help structural funds to deliver greater benefits to the market.

EIF has signed 8 National and 3 Regional Holding Fund agreements.

In Lithuania, the JEREMIE Holding Fund is financed from the EU Structural Funds under 2007-2013 Economic Growth Operational Programme of Lithuania and managed by the EIF.

For additional information please contact:

David Yormesor, EIF Communications Unit, tel. +352 426 688 346, e-mail d.yormersor@eif.org
Vaidotas Cucenas, Nordea Bank Finland Plc Lithuania Branch Head of Communication, tel. +370 5 2361397, e-mail vaidotas.cucenas@nordea.com