News

A new and innovative investment initiative dedicated to boosting equity investments made into Baltic enterprises has today been launched by the European Investment Fund (EIF) and the three Baltic States. The Baltic Innovation Fund will invest EUR 100 million into private equity and venture capital funds focussed on the Baltic States over the next four years through a ‘fund of funds’ process to further developing equity investment into Small and Medium sized enterprises (SMEs)  to boost growth.
The Baltic Innovation Fund management agreement was signed in Vilnius today by the EIF and representatives from three Baltic States. The EIF is investing EUR 40 million alongside investments of EUR 20 million each from the national agencies - INVEGA in Lithuania, the Latvian Guarantee Agency (LGA) in Latvia and KredEx in Estonia.
European Investment Fund, Chief Executive, Richard Pelly stated, “This initiative is a result of close co-operation between the EIF and the three Member States from the Baltic region to create a long-term investment scheme that will attract additional private finance and implement the best market standards for equity investing in businesses. EIF is proud to have led this process and looks forward to the implementation of investments beginning in 2013”.
Rimantas Žylius, Lithuanian Minister of Economy, stated “Lithuania welcomes this long-term partnership between EIF and the three Baltic States which is the first initiative of such kind. The Baltic Innovation Fund will increase the accessibility of private equity and venture capital for SMEs with high growth potential and operating in a Baltic region. The creation of ‘fund of funds’ will contribute towards further regional private equity and venture capital market development, will strengthen the partnership and cooperation between the Baltic States and EIF. This initiative will have a positive impact not only for further development of Lithuanian venture capital ecosystem, but certainly will stimulate the growth of employment and economic competitiveness of the Baltic States“.
Klavs Vasks, Chairman of the Board, Latvian Guarantee Agency, stated “This initiative should over next few years result in the financing of more than 50 growth-focussed enterprises, that will often either already be pan-Baltic or will use the investment capital to become pan-Baltic. The four investing parties are also adopting this pan-Baltic approach in creating this fine example of fruitful cooperation between the Baltic States and EIF.
According to Andrus Treier, Chief Executive Officer of KredEx, the new fund is a financing solution that has been missing from the Baltic market. “BIF is an excellent illustration of the three Baltic States acting together, enabling to make small capital markets together more attractive for investors and creating further financing possibilities for enterprises. Close cooperation with EIF as an experienced and well known investor ensures that the best market standards are followed giving additional assurance to possible private and institutional investors. Without such cooperation it would be very hard to attract Venture Capital investments in comparable size.”

The investment process for the Baltic Innovation Fund will begin in 2013 when EIF will start to process transactions with selected Fund Managers. Each Fund manager will be expected to attract an additional and equivalent amount of private finance from pension funds and private investors which will double the amount of investment capital within the programme. Across a 4 year investment period, between 3 to 6 Fund Managers will receive investment commitments which will then be invested into innovative high-growth SMEs.
Importantly, the Baltic Innovation Fund is the result of strong co-operation between the three Baltic States and the EIF that is unique in its nature across Europe and places the region in a position to benefit from greater levels of private investment than before. Furthermore, the three governments are taking a lead in this process by investing into the Baltic Innovation Fund through their respective national agencies and utilising the revolved Structural Funds from previously successful SME support schemes to do so. This unique trans-national process provides a real opportunity to further develop the Baltic PE & VC market.

Background information
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 over EUR 6bn at end 2011. With investments in over 370 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 guarantees loan portfolio totalled over EUR 7.6bn in close to 220 operations at end 2011, positioning it as a major European SME guarantees actor and a leading micro-finance guarantor.

KredEx is an Estonian financial institution helping Estonian enterprises to grow business and expand more safely to foreign markets, offering mezzanine loans, credit lines, credit insurance and guarantees with state guarantee.

Latvian Guarantee Agency (LGA) is Latvian specialized development finance institution active in all segments of financial market, investing in VC funds, providing mezzanine loans and loan, leasing and export guarantees. LGA has a capital base of EUR 175m, mostly originating from various SF programmes. Currently it has invested in 6 VC funds, with up to 3 more signed by end 2012. LGA has issued more than 1000 loan, leasing and export guarantees.

INVEGA promotes the development of small and medium-sized enterprises in Lithuania facilitating their access to the sources of financing. The key objectives of activities of INVEGA are to provide financial services – the guarantees, to implement and administer financial and other support measures for small and medium businesses.

Contacts:
EIF: David Yormesor, tel : +352 42 66 88 346 , e-mail : d.yormesor@eif.org  
KredEx: Tarmo Seliste, tel +372 667 41 16, e-mail: tarmo.seliste@kredex.ee
LGA: Krisjanis Zarins, tel: +371 673 593 87, e-mail : krisjanis.zarins@lga.lv
INVEGA: Inga Beiliūnienė, tel. +370 5 211 3566, e-mail: inga.beiliuniene@invega.lt

From now on, representatives of small and medium businesses and individuals, who are just intending to start business, will get a unique opportunity to use the special conditions, created by the State, for development of business. Natural or legal entities, who have taken very small loans of 86 thousand Litas from the Enterprise Promotion Fund (EPF), will be able to get financing of 95 perc. of the interest paid. This benefit will apply not only to the newly taken loans from the above mentioned fund, but also to the loans in use in order to develop business.
Financing of 95 perc. of interest paid is currently one of the most favourable conditions in the state loan market for borrowers in order to start business. These opportunities have been created thanks to collaboration of three ministries – the Ministry of Social Security and Labour, Economy, and Finance, - Lithuanian Central Credit Union (LCCU), and the company “Investicijų ir verslo garantijos” (INVEGA).
Micro-credits, issued to new entrants, include an interest from 5.5 perc. to 9.5 perc., depending on the variable rate 3-month VILIBOR share. Though, a borrower was reimbursed only up to 50 perc. of interest paid up to date.
According to Minister D. Jankauskas, both before and hereafter, when issuing loans from EPF and claiming for a micro-credit, priorities will be given to the most socially vulnerable groups – unemployed, young people under 29, and people of pre-retirement age, older than 50.
"We believe that nearly hundred-per-cent financing of loan interest will encourage the willing ones to start their own businesses to actively take the advantage of the Entrepreneurship Promotion Fund. We create even more opportunities than ever before for very small, small companies, and natural persons to apply for micro-credits. Both willing to start a business and those, who have already obtained a loan from the fund, are qualified to apply for the benefit. Considering the fact that it can be difficult for new entrants to take first steps by themselves, they get consultants for free who not only help them to develop a business plan, to get a loan, but also instruct, advise loan recipients in preparing and implementing a business plan,” stated Minister D. Jankauskas.
Minister D. Jankauskas noted that micro-credits and entrepreneurship trainings, provided by EPF for free, allow to create rather equal competitive conditions for citizens willing to start a business or to develop an existing one, regardless of where they live – in a city, town, or rural area.
Vice-Minister of Economy Daumantas Lapinskas argued that this financing of loan interest would provide a unique opportunity for people willing but hesitating to make step and start their own business.
“The State makes it easier to borrow for business start-up. This is a unique opportunity for youth and older people supposing to have ideas, the implementation of which lacks funds,” says Minister of Economy D. Lapinskas.
In order to facilitate borrowing by the Entrepreneurship Promotion Fund, terms and conditions of partial financing of loan interest have been changed. Therefore, since the beginning of this year, all the small and medium business entities, who obtained loans from the Entrepreneurship Promotion Fund since 1 November, 2010, will be reimbursed 95 perc. of interest paid, but no more than 30 perc. of the loan amount. Interest will be reimbursed regardless of whether INVEGA warranty was granted for their loans or not.
Currently, 165 new entrepreneurs have used soft loans, provided by Lithuanian credit unions from the Entrepreneurship Promotion Fund for business start-up. The total amount of issued business loans amounts to 10.19 million LTL. A many as 73 entrepreneurs, who obtained loans from EPF, have used the opportunity to receive INVEGA guarantee for financing up to 80 perc. of loan repayment.
“Residents of Kaunas and Vilnius regions borrow from the Enterprise Promotion Fund most intensively. Demand in business loan is felt in other cities as well, however, we hope that invalidation of adjusted interest financing conditions will significantly expand the geography of new businesses development and people will borrow will less hesitation,” says Fortunatas Dirgincius, CCUL, the chairman of administration and the board of LCCU, which represents the majority of credit unions.
Entrepreneurship Promotion Fund was established on 30 December 2009, at the initiative of MSSL, upon signing of a tripartite agreement between MSSL, the Ministry of Finance, and INVEGA company.

On 9th November the first preferential business loan provision agreement has been signed implementing the project „Promoting Entrepreneurship“. The loan with UAB „Investicijų ir verslo garantijos“ (INVEGA) guarantee was provided by the credit union „Vilniaus taupomoji kasa“ for the company UAB „Ad Park“ operating in Vilnius. Recently established advertising and printing services providing company will use the received loan to buy wide format printing facility and to supplement the working capital for industrial raw material purchase.

The first borrowers, the owners of UAB „Ad Park“, belong to one of the priority groups of the Project „Promoting Entrepreneurship“ – the group of young people under 29 years. Implementing the conditions of the project the said company received the maximum – 86 thousand litas – a four-year term loan. The company who has received the first loan from Entrepreneurship Promotion Fund profited from the concessions of the project and appealed to INVEGA, who provided the guarantee for 80 percent of the total amount of above mentioned loan.

The project „Promoting Entrepreneurship“, of a total value of 50 million litas, is being implemented by the consortium of Lithuanian Central Credit Union and other 57 credit unions operating in Lithuania. Five and a half year lasting European Union Structural Funds project aims to improve investment, employment and living conditions in Lithuania, to promote the entrepreneurial skills of society and the creation of new work places.

Preferential loans from the Entrepreneurship Promotion Fund, managed by INVEGA, are granted to small and medium-sized enterprises, operating for less than one year, social enterprises or natural persons, wishing to start or develop their business by increasing its competitiveness and efficiency. These loans must be allocated to investment or supplement of working capital.

At the early stage business owners must first prepare a business plan, therefore the consortium of credit unions at the end of September this year has began providing trainings and consultations for entities seeking to implement their business ideas. Trainings in the thirteen cities in Lithuania are planed for November.

Providing the preferential business loan 90 percent of the amount is funded by the Entrepreneurship Promotion Fund, 10 percent – from credit union funds. Credit union members, having received the preferential credits, may apply to INVEGA for up to 80 percent guarantee and the compensation of 50 percent of interest paid.

Information obtained from the Lithuanian Central Credit Union.

Small companies that have been operating for less than one year, social enterprises, entrepreneurships and natural persons willing to start up and/or develop their own business are eligible for microcredits from the Entrepreneurship Promotion Fund (EPF). UAB Investicijų ir Verslo Garantijos (INVEGA), which performs the functions of the EPF manager, and the consortium of 57 credit unions selected by the tendering procedure, represented by the Lithuanian Central Credit Union (LCCU), signed a cooperation agreement establishing the main terms and conditions for the granting of microcredits. 

Zita Gurauskienė, Director General of INVEGA, the promotion of entrepreneurship where financial engineering measures that are combined with training for those intending to start up their own business is one of the most advanced ways to promote entrepreneurship in the whole of Europe.  “These days not everyone has the courage to start up their own business. The majority of young entrepreneurs lack knowledge necessary to start up a business. Having the possibility of filling in the gaps of knowledge with specialised training and having taken advantage of the offered financial opportunities, more Lithuanian citizens will be able to start their own business, value added will be created and the economic situation in Lithuania will improve” claimed the Director General of INVEGA.

Those intending to start up a business will have to prepare a specific business plan. Therefore, the consortium of credit unions undertook to organise and provide training and consultations for those who are willing to implement their business ideas. Consultants will be selected provide consultations to loan recipients on drafting and implementing business plans. Credit unions can grant 3-5 year loans for the implementation of these plans. Loans repaid during this period can be granted to other persons or companies intending to start up a business.

“Lithuanian citizens and businesses which have come across difficulties currently need an extended helping hand. We hope that microcredits provided by credit unions will help shake off the economic stagnation. The most important thing for us is that people would start up new businesses, create new jobs and grow Lithuanian capital”, Sigitas Bubnys, Head of the LCCU Administration.

The projections are that at least 5,000 citizens will take part in the training, 1,200 entrepreneurs or companies will be granted loans for starting up a business or developing the existing one. 

INVEGA will lend to the consortium of credit unions which won the tendering procedure up to LTL 50 million from the European Social Fund by the end of 2015, and this amount will have to be re-lended to eligible borrowers in the form of microcredits – up to LTL 86,000. Loans will be granted in litas. The consortium of credit unions will assume all the lending-related risks.

A microcredit taken for investments or replenishment of working capital will have to be granted for the starting up of a new business or development of the operating company by increasing its competitiveness and efficiency of its activities.

A single borrower may be granted only one loan that will need to have a specific loan repayment schedule. Having been granted a microcredit, one will be able to receive an INVEGA guarantee and partial compensation of loan interest.

No administration fees will be charged on loans granted to borrowers. However, the borrower will have to pay annual interest at the rate of 3-month VILIBOR +0.1% but not less than 2% and not more than 6%, plus the credit union margin (fixed portion of interest), which may not exceed 3.49%.
For microcredits please contact the Lithuanian Central Credit Union, tel: (+370 37) 200 454, (+370 37) 719816, (+370 37) 200584, e-mail: lcku@lku.lt _CLOAKING , website: www.lku.lt.

The Entrepreneurship Promotion Fund was established under the tripartite agreement signed between the Ministry of Social Security and Labour, the Ministry of Finance and UAB Investicijų ir Verslo Garantijos at the end of December 2009. Funds are allocated through Measure “Entrepreneurship Promotion” of the Operation Programme for the Development of Human Resources administered by the Ministry of Social Security and Labour. It is financed from the European Social Fund. The purpose of the Fund is to promote entrepreneurship, self-employment and creation of new jobs. Thus, it is sought to create conditions for microenterprises, small companies and natural persons to start up a business and for social enterprises to develop the existing one.

This year, state aid to small and medium-sized business (SME) grew by a quarter of a billion – the Government of the Republic of Lithuania increased the limit of liabilities of UAB Investicijų ir Verslo Garantijos (INVEGA) for 2010 from LTL 650 million to LTL 900 million. From the newly approved liability limit, LTL 100 million is set for special guarantees related to export credit insurance and LTL 70 million to issued guarantees intended for the renovation (refurbishment) of multi-storey residential buildings.

“The business exhausted after the economic recession constantly feels the lack of financial resources and this often becomes the reason for the restriction or even suspension of activities; therefore, we hope that the greater liabilities undertaken by INVEGA for loans to businesses will allow more companies to take a breath of fresher air and not only to survive but also to spin the flywheel of operations faster”, Zita Gurauskienė, Director General of INVEGA, happily stated.

The limit of liabilities sets the maximum threshold for liabilities that INVEGA can undertake at any time for small and medium sized business entities which were granted loans by credit institutions and were issued a guarantee by INVEGA. “The INVEGA guarantee basket increased by a quarter of a billon will become an even greater challenge for a small INVEGA staff; however, we can assure you that we will continue to provide guarantees to businesses for the amounts borrowed by them from banks”, said Zita Gurauskienė. “We take pleasure in the fact that our activities contribute efficiently to the implementation of the Economic Stimulus Plan of the Government and improvement of the business environment”.
From the beginning of its activities in 2001 until 15 March 2010, INVEGA has issued 2,479 guarantees to small and medium sized business entities for the amount of LTL 649.4 million, and the amount of guaranteed loans totals LTL 996.8 million.

The value of UAB Investicijų ir verslo garantijos (INVEGA) which has proved its relevance for small and medium-sized business (SME) during the period of economic growth has particularly enhanced during the times of economic recession. Though in the beginning of the year the borrowing from banks has reduced, for the purpose of implementing the Plan for the Stimulation of Economy approved by the Ministry of Economy INVEGA offered several measures aimed at improving environment for SME in Lithuania which had a positive impact on the performance results of H1 of the company itself.

As a result of the prolonged stagnation of crediting the amount of guaranteed loans granted to SME during the first half of this year totalled only LTL 28.5m (by 77.5% less than during the same period of 2008) and the total amount of guarantees totalled mere LTL 21.2m (by 72.4% less than during the same period of 2008). During six months of 2009 INVEGA guaranteed the total of 100 business loans (by 49% less than during the same period of 2008) for the start-up or development of business.

Measures of the Plan for the Stimulation of Economy introduced to the market with effort of the Ministry of Economy and INVEGA generated positive outcomes already in June – the demand for INVEGA guarantees increased and issued guarantees exceeded by 6% the comparable figure of June 2008.

“When due to the shortage of funds in Lithuania at the beginning of this year commercial banks reduced lending to SME and tightened risk assessment requirements INVEGA introduced several measures of the Plan for the Stimulation of Economy promoting credits to SME: micro-credits granted from national resources and from the newly set up INVEGA Fund administering the EU Structural Funds were introduced to the market alongside another possibility of financing via the Open Credit Fund entitling all banks which have signed agreements with INVEGA Fund to lend its resources to SME, as well as the decision to issue guarantees to enterprises in temporary financial difficulty. All this also influenced the number of guarantees issued by INVEGA in the end of Q2”, – said Zita Gurauskienė, Director General of UAB Investicijų ir verslo garantijos.

The ratio of loans for investments and working capital guaranteed by INVEGA has changed considerably during the first half of 2009: during the previous years of the Company’s activities the major part of guarantees was issued for the financing of investment projects, while results of the first half of the year which has jus ended show that the larger part of all guarantees issued for loans to SME (66%) comprises loans for supplement working capital and only 34% – for the implementation of investment projects. 33% of guarantees were issued for loans to enterprises engaged in production, 34% – for loans to service enterprises and 33% of guarantees – for loans to sales enterprises.

The most active partners of INVEGA in H1 2009 were AB Šiaulių bankas (47%), AB SEB bankas (16%) and AB Ūkio bankas (13%), and the largest amounts of loans with INVEGA guarantee were taken by entrepreneurs from counties of Vilnius, Kaunas, Panevėžys and Alytus.

From the beginning of its activities in 2001 INVEGA has already issued 1 956 guarantees for loans taken by SME with the amount of guaranteed loans totalling LTL 851m and of guarantees – LTL 544m.

Having obtained a positive decision from the European Commission today the Government passed the resolution authorising UAB Investicijų ir verslo garantijos (INVEGA) to issue guarantees to credit institutions and to guarantee loans granted to large enterprises. Until present INVEGA guarantees were issued only for loans obtained by small and medium-sized enterprises (SME).

The Government could not issue guarantees for loans to large enterprises because of the prolonged process of notification in the European Commission (EC). This Monday EC adopted the positive decision approving the intention of the Government to issue guarantees for loans to enterprises encountering financial problems and allowing to provide state aid in the form of guarantees for loans taken by the Lithuanian enterprises for up to EUR 500 000 (LTL 1.726m). Those enterprises which on 1 July 2008 did not encounter any financial difficulties shall be eligible to receive the state aid. The aid may be provided only until 31 December 2010.
INVEGA will issue guarantees to enterprises for loans taken for supplementing the working capital and only to industrial or service enterprises.
Maximum exposure which qualifies for INVEGA guarantee may not exceed the amount of the borrower’s annual wage and related tax expenses of the previous accounting period. INVEGA guarantee may not exceed 80% of the principal and LTL 5m. The total limit of INVEGA liabilities during the temporary period of granting such aid will amount to LTL 150m and sum total of initial amounts of INVEGA guarantees for loans taken by large enterprises during the entire period shall not exceed LTL 70m.
The temporary possibility created for INVEGA to issue guarantees to credit institutions for loans granted to SME and large enterprises will enable to avoid negative implications for the social-economic situation resulting from possible wind-ups of enterprises. 
Large enterprises in Lithuania account only for 0.6% of all enterprises, but they create 34% of GDP of Lithuania and employ 26% of employees.
The provision of guarantees to credit institutions is one of measures provided for in the Plan for the Stimulation of Economy (PSE) drafted by the Ministry of Economy, which is aimed at creating more favourable conditions for the development of business. PSE is a package of measures offered by the Government aimed at facilitating conditions for business activities, attracting additional funds to the Lithuanian market and improving business access to credits, retaining jobs diminishing thereby social tension in the society. 
 
Information based on data of the Ministry of Economy

On 30 March UAB Investicijų ir verslo garantijos (INVEGA) signed a cooperation agreement with AB bankas Finasta. This bank of the Lithuanian capital specialises in the provision of investment and private banking services.

INVEGA will cooperate already with the twelfth bank operating in Lithuania.

INVEGA launched the initiative to find more effective ways how to improve the crediting conditions for small and medium-sized enterprises (SME). INVEGA issuing government guarantees to credit institutions for loans to SME invited representatives of the Association of Lithuanian Banks and credit institutions to discuss this matter.

“Deteriorating economic situation in Lithuania which has limited financing for small and medium-sized enterprises stimulated us to look for ways how to improve and simplify access sources of financing to SME and therefore we are considering the possibility of revising our scheme of the issuance of guarantees and all procedures related with financial assistance to SME. We hope that this will also encourage credit institutions to assess crediting risk more flexibly facilitating thereby business financing conditions”, – says Zita Gurauskienė, Director General of INVEGA.
The meeting introduced planned financial engineering and related instruments to be implemented financed from 2007-2013 Structural Funds of the European Union and discussed the most recent amendments to the conditions of the issue of INVEGA guarantees, procedure of their issuance as well as applicable procedures of disbursement of guarantee payments as specified in the cooperation agreements concluded with credit institutions.
During discussions certain possible essential changes in services provided by INVEGA aimed at stimulating the crediting of SME were clarified: INVEGA guarantee issuance scheme was improved, the issue of guarantees for credit lines and permissible overdrafts was started because these lending products as working capital financing instruments are more attractive to SME, allowing to use the funds of working capital loans also for covering all current expenses of enterprises, etc.

“INVEGA is ready to do everything to facilitate and improve operating efficiency of business. This is what we also expect from other financial market players”, – said Z. Gurauskienė.

As from 11 February 2009 UAB Investicijų ir verslo garantijos (INVEGA), which issues guarantees to credit institutions for loans taken by representatives of small and medium-sized business (SMB) to supplement their working capital, will guarantee up to 80% of the loan amount.

Earlier INVEGA guaranteed only maximum 80% of investment loans. The part of a loan guaranteed by INVEGA may be smaller than maximum amount depending upon the need for the guarantee and risk level of the borrower or project implemented by him. “Under tight crediting conditions this decision taken by INVEGA Board is aimed at simplifying borrowing procedures for SME representatives and improving business development conditions,” – says Zita Gurauskienė, Director General of INVEGA.

The Ministry of Economy of the Republic of Lithuania compensates to SME part of interest paid on loans. From 2009 interest will also be compensated for investment and working capital loans guaranteed by INVEGA. Up to 50% of interest paid to banks will be compensated to SME which have used INVEGA guarantees. Loan interest will be compensated from the EU Structural Funds. This measure financed with EU SF proceeds will be implemented through a global grant, i.e. global grant funds will be allocated to INVEGA as to the manager of the global grant for compensation of interest on loans to SME.

The summer time of 2008, compared with earlier years of activity, persisted rather efficiency and steady for „Invega“: during three months issued 85 guarantees, the amount of guaranteed loans reached LTL 60,3 million and amount of guarantees was LTL 34,4 million.

The most of guarantees (40%) were issued for loans which amount reached from 100 thousand till 500 thousand LTL. The most active (51.8 %) were small and medium sized enterprises which already have business experience and work more than 5 years.
89,4% of all guarantees were issued to entrepreneurs who took loans from banks for the implementation of investment projects, and the remaining part (10,6%) was borrowed by businessmen to supplement their working capital. If we compare the guarantee distribution by kind of activity, 57,6% of all guarantees were issued to enterprises rendering miscellaneous services, another part of guarantees (25.9%) was received by business enterprises engaged in manufacturing, and 16.5% divided between trading companies.
During summer time of 2008, the greatest majority of projects was submitted by the banks AB SEB Vilniaus bankas (28.2%), AB DnB NORD bankas (18.8%) and AB „Parex“ bankas (15.3%).

During H1 2008, UAB "Investiciju ir verslo garantijos" (hereinafter - "Invega") issued to banks already 204 guarantees for loans taken by small and medium-sized enterprises, and the total amount of guarantees stood at LTL 76.8 million. The amount of guaranteed loans grew by 0.6% compared with H1 2007 and reached LTL 126.7 million.

47.1% of all guarantees in H1 2008 were issued to enterprises rendering miscellaneous services, another part of guarantees (43.1%) was received by business enterprises engaged in manufacturing, and 9.8% divided between trading companies.

Traditionally the bulk of guarantees were issued to secure the repayment of investment loans borrowed by businessmen. The share of guarantees for such loans in the overall portfolio of guarantees issued in H1 makes up 83.8%, whereas the remaining (16.2%) guarantees were issued to businessmen taking loans to supplement their working capital.

The largest number of projects during H1 2008 was submitted by AB SEB Vilniaus bankas (25%), AB DnB NORD bankas (16.8%) and AB Ukio bankas (16.8%).

In H1 2008 the smallest and the largest amounts of "Invega" guarantees was LTL 10.000 and LTL 2,000,000, respectively; the average amount of guarantees stood at LTL 378,530, and the average amount of guaranteed loan was LTL 623,689.
From the very outset of its activities (29 November 2001) until 30 June 2008 "Invega" issued  1,740 guarantees to support the financing of projects of small and medium-sized enterprises, which secured the repayment of LTL 738.6 million amount of loans to banks, and the amount of issued guarantees was LTL 476 million.

From the beginning of the activity until the 31 May 2008, „Investments and Business Guarantess“ (INVEGA) issued 1707 guarantees. The amount of guaranteed loans reached LTL 713,9 million. Total amount of guarantees was LTL 462,9 million.
853 guarantees (out of all 1707 issued guarantees), LTL 411,3 million of guaranteed loans and LTL 275,9 million of guarantees are included in the portfolio counter-guaranteed by the European Investment Fund (EIF).
79,6% of all guarantees were issued to entrepreneurs who took loans from banks for the implementation of investment projects, and the the remaining part (20,4%) was borrowed by businessmen to supplement their working capital.
46,5% of guarantees during this period  was issued to companies in the service sector, 52,0% - to production enterprises, and 1,5% divided between trading companies.
More than 30% of all guarantees were issued to start up’s companies, which operates up till 3 years.

During October 2007, UAB "Investiciju ir verslo garantijos" (INVEGA) issued 49 guarantees, i.e. by 1,2 times more than during the respective period of 2006. The amount of guaranteed loans reached LTL 20,12 million. Total amount of guarantees was LTL 14,45 million.
91,8% of all guarantees were issued to entrepreneurs who took loans from banks for the implementation of investment projects, and the remaining part (8,2%) was borrowed by businessmen to supplement their working capital.

During October 2007, the greatest majority of projects was submitted by the banks AB Siauliu bankas, AB SEB Vilniaus bankas and AB Ukio bankas. Guarantees issued to these banks accounted for 22,4, 20,4 and 20,4% respectively of the total number of guarantees issued during the aforementioned period.

Micro-credits disbursement which was started in August 2006 to small and medium-sized enterprises accounted for more than LTL 31 million. The Government of the Republic of Lithuania allocated LTL 28.8 million to grant micro-credits. Now these assets are fully used and the other dispensations of money are continued from repaid micro-credits.
Micro-enterprises benefited from the largest part of the amount of micro-credits - LTL 27.7 million. LTL 10.8 million of micro-credits were granted to enterprises carrying out their activities in the regional centres that should be developed: Alytus, Marijampole, Taurage, Telsiai and Utena.

Micro-credits funds (the funds of closed PHARE programmes (non-repayable support to Lithuania)) were lent to the bank AB Siauliu bankas (LTL 15 million), UAB Medicinos bankas (LTL 8.3 million) and AB DnB NORD bankas (LTL 5.5 million), which have offered the best conditions for micro-crediting of enterprises and have won the selection. The provision of micro-credits is administered by the company UAB "Investiciju ir verslo garantijos" (INVEGA).
AB Siauliu bankas LTL 16.6 million allocated to micro-enterprises and LTL 6.2 million to enterprises located in the regional centres that should be developed.
UAB Medicinos bankas has used the total of LTL 8,9 million, of which LTL 7.7 million were received by micro-enterprises.
AB DnB NORD bankas has granted micro-credits for LTL 5.6 million, of which LTL 3.5 million were disbursed to micro-enterprises. LTL 2.5 million were allocated by this bank to enterprises located in counties eligible to preferential micro-crediting.
The three banks referred to above can use the funds allocated for micro-crediting until 31 December 2012. If the micro-crediting measure justifies itself, the additional amount for this purpose will be allocated from the European Union Structural Funds financial assistance for 2007-2013.
Micro-credits are granted according to the simplified procedure and their interest is lower than usual. Micro and other enterprises operating in the regional centres subject to development municipalities (municipal territories of Alytus, Marijampole, Taurage, Telsiai and Utena counties) benefit from more preferential conditions. Accordingly, financial assistance is not concentrated only in these aforementioned regions and can be applied for by businessmen from all counties.

During 9 months 2007, UAB "Investiciju ir verslo garantijos" (hereinafter - INVEGA) issued to banks five times more guarantees compared with the beginning of activity in 2002. The amount of guaranteed loans is twelve times as large as the amount of guarantees provided in the first years of activity.

During 9 months 2007 period INVEGA issued 377 guarantees for loans taken by small and medium-sized enterprises. This amount is 1,7 time as large as the amount of guarantees issued during the same period of 2006. The total amount of guarantees stood at LTL 115,2 million and it is 1.3 times more, compared with same period in the year 2006.

284 guarantees (out of all 377 issued guarantees), which total amount is LTL 78.5 million, are included in the portfolio counter-guaranteed by the European Investment Fund (EIF).

The most guarantees INVEGA provided to AB SEB Vilniaus bankas (24,49 %), AB Siauliu bankas (21,22 %) and AB Ukio bankui (16,71 %).

From the very outset of its activities (29 November 2001) until 30 September 2007 INVEGA issued 1,424 guarantees to support the financing of projects of small and medium-sized enterprises. The total amount of guaranteed loans composed of LTL 560.4 million. From the start of activities of INVEGA until 30 September 2007, LTL 10.8 million of interest was compensated to business enterprises which have availed themselves of INVEGA guarantee.

During H1 2007, UAB "Investiciju ir verslo garantijos" (hereinafter - "Invega") issued to banks already 262 guarantees for loans taken by small and medium-sized enterprises, and the total amount of guarantees stood at LTL 83.3 million. This amount is twice as large as the amount of guarantees issued during the same period of 2006. The amount of guaranteed loans grew by 1.7 times, compared with H1 2006 and reached LTL 126.0 million.
227 guarantees (out of all 262 issued guarantees), LTL 114.8 million of guaranteed loans and LTL 78.5 million of guarantees are included in the portfolio counter-guaranteed by the European Investment Fund (EIF).

Distribution of guarantee portfolio in H1 2007 by type of activity of enterprises was almost even - 46.56% of all guarantees were issued to enterprises rendering miscellaneous services, another part of guarantees (53.44%) was received by business enterprises engaged in manufacturing. Services provided by "Invega" were mostly used by enterprises engaged in the manufacturing of wood articles, construction, public catering and hotel services.
It should be noted that during the reporting period particular activity was observed among micro-enterprises employing less than 10 employees. As much as 47% of the number of guarantees issued during the aforementioned period was allocated for the financing of projects of these enterprises.
Traditionally the bulk of guarantees were issued to secure the repayment of investment loans borrowed by businessmen. The comparative share of guarantees for such loans in the overall portfolio of guarantees issued in H1 makes up 86.6%, whereas the remaining (13.4%) guarantees were issued to businessmen taking loans to supplement their working capital.
The largest number of projects during H1 2007 was submitted by AB Siauliu bankas, AB SEB Vilniaus bankas and AB Ukio bankas. Guarantees issued to these banks accounted for 21.8, 19.5 and 18.3 of the total number of guarantees issued during the aforementioned period.
In H1 2007 businessmen from Vilnius, Kaunas and Panevezys were the most active borrowers of bank loans with "Invega" guarantee; small and medium-sized enterprises which previously were not active also began using the services of this company.
In H1 2007 the smallest and the largest amounts of "Invega" guarantees was LTL 15,635 and LTL 1,600,000, respectively; the average amount of guarantees stood at LTL 321,067, and the average amount of guaranteed loan was LTL 480,957.
From the very outset of its activities (29 November 2001) until 30 June 2007 "Invega" issued  1,309 guarantees to support the financing of projects of small and medium-sized enterprises, which secured the repayment of LTL 508.63 million amount of loans to banks, and the amount of issued guarantees was LTL 333.1 million. As an outcome of the implementation of projects financed with "Invega" guarantee from the start of its activities, the creation over 5,000 new jobs is envisaged. From the start of activities of "Invega" until 30 June 2007, LTL 9.08 million of interest was compensated to business enterprises which have availed themselves of "Invega" guarantee.

On 8 May, 13.00, the Report on UAB "Investiciju ir verslo garantijos" (hereinafter - "Invega") was presented during the meeting of the Government of the Republic of Lithuania and assessed positively. The Report was delivered by the Minister of Economy V.Navickas, with Zita Gurauskiene, Director General of "Invega" and Lina Liubauskaite, Advisor of the Business and Finance Division of the Government Office were among the meeting participants.

During the year of its operation, i.e. until 1 May 2007, "Invega" issued 1,214 guarantees, guaranteed loans for LTL 454.48 million and compensated interest in the amount of LTL 9.08 million. Creation of more than 5,900 new jobs is envisaged upon implementation of the guaranteed projects.

Demand for micro-credits disbursement of which started in August 2006 exceeded expectations: the total amount disbursed to 348 small and medium-sized enterprises accounted for LTL 24.6 million or 87% of all micro-credits planned for disbursement. Micro-enterprises benefited from the largest part of the amount of micro-credits - LTL 22 million. LTL 8.8 million of micro-credits were granted to enterprises carrying out their activities in the regional centres of Alytus, Marijampole, Taurage, Telsiai and Utena subject to development.

Seeking to stimulate the development of small and medium-sized enterprises in  Lithuania, the Government of the Republic of Lithuania approved the proposal of the Ministry of Economy to grant micro-credits and allocated LTL 28.8 million of funds of closed PHARE programmes (non-repayable support to Lithuania). These funds were lent to the bank AB Siauliu bankas (LTL 15 million), UAB Medicinos bankas (LTL 8.3 million) and AB DnB NORD bankas (LTL 5.5 million), which offered the best conditions  of micro-crediting of enterprises and won the selection. The provision of micro-credits is administered by the company UAB "Investiciju ir verslo garantijos"€ (INVEGA).

AB Siauliu bankas has already used for micro-credits all funds lent to it, i.e. LTL 15 million, of which LTL 14 million were allocated to micro-enterprises and LTL 1 million - to small enterprises. Enterprises located in the regional centres subject to development received LTL 5.9 million. As AB Siauliu bankas has already used up all funds allocated for micro-crediting purposes, it continues the granting of small loans from repaid micro-credits.
UAB Medicinos bankas has used the total of LTL 5.5 million, of which LTL 4.7 million were received by micro-enterprises.

AB DnB NORD bankas granted micro-credits for LTL 4.1 million, of which LTL 3.2 million were disbursed to micro-enterprises. LTL 1.8 million were allocated by this bank to enterprises located in counties eligible to preferential micro-crediting.

The three banks referred to above can use the funds allocated for micro-crediting until 31 December 2012. If the micro-crediting measure justifies itself, the additional amount for this purpose will be allocated from the European Union Structural Funds financial assistance for 2007-2013.

Micro-credits are granted according to the simplified procedure and their interest is lower than usual. Micro- and other enterprises operating in the regional centres subject to development municipalities (municipal territories of Alytus, Marijampole, Taurage, Telsiai and Utena counties) benefit from more preferential conditions. Accordingly, financial assistance is not concentrated only in these aforementioned regions and can be applied for by businessmen from all counties.