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With a view to promoting the development of small and medium-sized enterprises in Lithuania, the Government of the Republic of Lithuania approved the proposal from the Ministry of Economy of the Republic of Lithuania to grant microcredits and allocated LTL 28.8 million funds of closed PHARE programmes (non-repayable assistance to Lithuania). These funds were loaned to the banks AB Siauliu bankas, UAB Medicinos bankas and AB DnB NORD bankas which won the selection as banks offering the best conditions of the granting microcredits to businesses.
The aforementioned banks can use the funds allocated for microcrediting until 31 December 2012.

Microcredits are loans in the amount of up to LTL 86,320 (up to EUR 25,000 or its equivalent in another currency) granted to micro, small or medium-sized enterprises (SME).
The banks undertook to grant to microenterprises as much as 85% of all microcredits.

Microenterprise - is a business operating and registered in the territory of Lithuania with up to 10 employees, annual income not exceeding LTL 7 million, book value of assets not exceeding LTL 5 million and satisfying the independence criterion as established in the Law on Small and Medium-sized Business.

Microcredits may be granted in the form of loans, credit lines or overdrafts for the financing of investments and working capital. Banks can grant maximum 2 microcredits per undertaking.

For the purpose of calculating the interest rate paid by the bank on funds received for microcrediting, the three moths EURIBOR is reduced by 1,25 percentage points, however the interest rate should not be less than 1% of annual interest, excluding enterprises operating in the municipal territories of Alytus, Marijampole, Taurage, Telsiai and Utena countries, for which interest rate due from the bank is determined reducing the three moths EURIBOR by 1,75 percentage point, however the interest rate should not be less than 0.5 per cent of annual interest, i.e. in this case interest due from banks will be by 0.5 per cent lower than usually.

The bank is required to disburse the funds aimed at microcrediting (a target loan obtained) during the initial disbursement period (until 1 October 2007). The initial disbursement period lasts 12 months of the last day of the current quarter in which the funds are transferred to the bank.

After SME repays the microcredit, the funds received can be used by the bank solely for the granting of new microcredits.

As the bank assumes the re-lending risks of all funds meant for microcrediting, collateral-related matters are settled with each bank separately. If the project and undertaking satisfies the established requirements, undertakings taking the microcredits are also eligible to benefit from INVEGA guarantees.