The European Investment Fund (EIF) and AB Siauliu Bankas signed an agreement for providing loans worth €40m to Small and medium sized enterprises (SMEs) in Lithuania.
The bank will manage the newly created Funded Risk Sharing product under the JEREMIE initiative, designed to stimulate lending from banks to SMEs over a defined two year period.
In order to implement the action, which will start in the first quarter of 2010, the EIF will provide €20m to Siauliu Bankas. This sum will be matched by an equal amount from the bank, therefore totalling €40m.
The Funded Risk Sharing instrument is designed and developed in response to the credit crisis, is structured to combine capital from the JEREMIE Holding Fund, which mobilises European Regional Development Funds, with capital provided from the bank on an equal basis.
The EIF expects to sign a total of four similar contracts with banks in Lithuania that will stimulate further SME lending up to a total of €344m.