Vilnius Factoring Company, a private lending company in Lithuania, has signed a cooperation agreement with the European Investment Fund (EIF) for the granting of microcredits up to 25,000 euros. Micro-enterprises and farmers in Lithuania can now benefit from non-bank business financing opportunities under the EU Programme for Employment and Social Innovation (EaSI). 10 million with an EIF guarantee. The agreement is backed by the Juncker Plan’s European Strategic Investment Fund, which allows the European Investment Bank Group to invest in riskier operations.
The aim of the EaSI programme is to provide micro-enterprises with better access to finance. More specifically, the conditions for access to such finance are less strict than access to finance from traditional banking sources, also thanks to significantly lower guarantee requirements. The funds can be invested both in the company’s working capital and in its business development.
Marianne Thyssen, European Commissioner for Employment, Social Affairs, Skills and Job Mobility, said: “Thanks to this financial support from the EU, more micro-entrepreneurs in Lithuania will have access to finance. This will enable them to start or develop their business, creating more jobs and opportunities at local level. I very much welcome this agreement which, once again, shows that, through our Employment and Social Innovation Programme, the EU can take concrete steps to tackle financial and social exclusion. This agreement brings us one step closer to building a more just and social Europe.”
Microcredits will be granted to small farmers and businesses with a maximum of 9 employees. The annual turnover and the amount of assets of these companies should not exceed EUR 2 million.
To date, the Vilnius Factoring Company has provided factoring services to micro, small and medium-sized enterprises. One year after its operations in Lithuania, the company has financed invoices worth EUR 113 million and provided services to 130 customers. In mid-August, Vilnius Factoring Company had a financing portfolio of 23 million euros.
The EU Programme for Employment and Social Innovation (“EaSI”) aims to support the EU’s objective of achieving a high level of employment, adequate social protection, the fight against social exclusion and poverty and the improvement of working conditions. The Microfinance and Social Entrepreneurship strand of the EaSI programme provides support to financial intermediaries offering microcredit to entrepreneurs or financing to social enterprises. The aim is to increase access to microfinance, which includes microcredit, i.e. loans of up to 25,000 euros, in particular for vulnerable people and micro-enterprises.
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