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Micro-credits and small loans are granted on the basis of the Annex to the Economic Growth Action Programme approved by Order No. 788 of 23 July 2008 of the Government of the Republic of Lithuania (Official Gazette Valstybės Žinios, 2008, No. 95-3721) and Commission Regulation (EC) No. 1998/2006 of 15 December 2006 on the application of Articles 87 and 88 of the Treaty to de minimis aid (OJ 2006 L 379, p. 5-10).

Loans of this type will be provided until 31 December 2013, or if a new regulation replacing Commission Regulation No. 1998/2006 has been adopted or it has been extended, the validity period of the measure will be prolonged until 31 December 2015.

Granting of micro-credits to SME under more favourable conditions is de minimis aid to SME provided according to the Micro-credits and Small Loans Scheme approved by Order No. 4-138 of 1 April 2009 of the Minister of Economy of the Republic of Lithuania. Loans will be granted to SME at lower interest rates than those applicable in the market.

When granting a loan, the difference between the indicative interest rate on loans with the Premium of 400 basic points set in the Communication of the European Commission and the interest rate applied to a particular loan will be taken into consideration. The difference will be considered to be equivalent to a subsidy and deemed as de minimis aid to SME.

In compliance with the provisions of Article 2 of Commission Regulation No. 1998/2006, the total de minimis aid granted to any one SME over the current and two previous fiscal years may not exceed 690,560 litas. The total de minimis aid granted to any one SME active in the road transport sector over the current and two previous fiscal years may not exceed 345,280 litas. These ceilings are applicable irrespective of the form of the de minimis aid or objective pursued and regardless of whether the aid granted by the Member State is financed entirely or partly by resources of Community origin.

When an overall aid amount provided under an aid measure exceeds this ceiling, that aid amount cannot benefit from Commission Regulation No. 1998/2006, even for a fraction not exceeding that ceiling. In such a case, the benefit of this Regulation cannot be claimed for this aid measure either at the time the aid is granted or at any subsequent time.

Every time, when establishing the aid amount for a particular loan, a check will be conducted whether the recipient of the loan is eligible for this aid and this amount will be reserved in the Granted State Aid Register. Upon granting of a loan to SME, the de minimis aid amount will be reserved in the Granted State Aid Register.

Micro-credit funds may be invested in all sectors of the economy, except for the cases listed in Article 1(1) of Commission Regulation No. 1998/2006:

• Transport companies taking loans for the acquisition of road freight transport vehicles;
• Projects of activities related to the manufacturing, primary processing and marketing of products listed in Annex No. 1 to the EC Treaty (i.e. projects in the agriculture, fishery and aquaculture sectors).

Granting of Micro-credits – Stage 1

The amount of 20 million litas is allocated to the Measure “Granting of Micro-Credits – Stage 1” (hereinafter referred to as the “Measure).

Funds are allocated in the form of targeted loan to Ūkio Bankas, Šiaulių Bankas and Medicinos Bankas, which submitted the best proposals. Funds earmarked for micro-credits are lent to banks only until 1 July 2013. The targeted loan in litas is granted to banks for a 4-year period, at a 0.5% interest rate of 6-month VILIBOR but not exceeding 5.5%. The main conditions for granting micro-credits are as follows:

• Maximum micro-credit amount – 175,000 litas
• One recipient may be granted not more than one micro-credit.
• Micro-credit recipients are micro-companies, small and medium-sized companies registered and carrying out their main activities in Lithuania.
• Purpose of micro-credits: to finance investments or working capital.
• Micro-credits are not granted to companies operating in the following sectors: wholesale trade, agriculture, construction, financial and insurance activities, legal activities
• Micro-credits may not be used for refinancing the existing liabilities to banks or other financial institutions.

After a micro-credit recipient has repaid a micro-credit or part thereof, the received funds will be used only for granting new micro-credits.

Granting of Micro-credits – Stage 2

On 8 April 2009, the Ministry of Economy, the Ministry of Finance and UAB Investicijų ir Verslo Garantijos (INVEGA) signed a tripartite financing agreement under which the INVEGA fund was established. The INVEGA fund will grant loans through banks to micro-companies, small and medium-sized companies. UAB Investicijų ir Verslo Garantijos was appointed the manager of this Fund.

In compliance with the Economic Growth Action Programme, the INVEGA fund selects financial intermediaries which will grant loans to micro-companies, small and medium-sized companies, by way of an open and transparent tender, according to the Project Selection Criteria approved by the Monitoring Committee.
A total of 100 million litas was allocated for this measure from the EU Structural Funds.

Under the micro-credit measure for SME, one company will be able to receive a loan of up to 350,000 litas to finance its investments and/or working capital.

The bank may grant only one micro-credit to any one recipient within a 12-month period.  Funds earmarked for micro-credits are lent to banks only until 31 December 2014.

The borrowing conditions for SME are as follows:

• Maximum micro-credit amount – 350,000 litas.
• Micro-credit recipient – company registered and operating in the territory of Lithuania, which complies with the definition of a micro-company or a small or medium-sized company in compliance with the Law on SME (companies will have to submit the Declaration of SME Status to the bank).
• Projects are implemented in the territory of Lithuania.
• The bank may grant not more than one micro-credit to one recipient within a 12-month period.
• The agreement for financing of investments or working capital (only in the form of a long-term or short-term credit) must be signed after 1 May 2009.
• Micro-credits may not be granted for refinancing of the existing credits or financial liabilities of credit recipients in the same bank or in any other financial institution.
• Micro-credits are granted only in litas.
• Interest payable on micro-credits must be variable (3-month VILIBOR).

After a micro-credit recipient has repaid a micro-credit or part thereof, the received funds will be used only for granting new micro-credits.