Faktoro Secures €55 Million EIF Guarantee to Boost Lithuanian SMEs and Social Enterprises

Faktoro Secures €55 Million EIF Guarantee to Boost Lithuanian SMEs and Social Enterprises

(IN BRIEF) Faktoro, a leading non-bank business financier in Lithuania, has entered into a guarantee agreement with the European Investment Fund (EIF) to provide up to €55 million in new financing for more than 800 Lithuanian companies. The funding, supported by the InvestEU programme, targets micro, small, and medium-sized businesses, along with social enterprises, cultural, creative, and green sectors. The deal also includes a €1.9 million subordinated loan under the InvestEU Capacity Building Investment program, enhancing Faktoro’s focus on micro and social enterprises. This initiative marks Faktoro as the first EIF partner in the Baltics dedicated to social business sectors, including care services for the elderly and disabled. The EIF’s Chief Executive, Marjut Falkstedt, praised the agreement for its strategic alignment with the EU’s goals of supporting inclusive and socially impactful initiatives.

(PRESS RELEASE) LUXEMBOURG, 26-Jun-2024 — /EuropaWire/ —  The European Investment Fund (EIF), part of the European Investment Bank Group and established to support Europe’s micro, small and medium-sized enterprises (SMEs), announces that Faktoro, a prominent alternative financier in Lithuania, has enhanced its commitment to local business growth by securing a guarantee agreement with the EIF. This new partnership will provide up to €55 million in fresh financing for over 800 companies across Lithuania, targeting micro, small and medium-sized businesses, as well as social enterprises, and sectors focused on cultural, creative, and green energy initiatives.

Supported by the InvestEU programme, the agreement enables Faktoro to deliver substantial financial support particularly to enterprises that typically struggle with securing adequate collateral for loans. This includes issuing microloans up to €50,000 for small businesses with fewer than ten employees. Faktoro is notably the first in the Baltics to concentrate on social enterprises, especially those providing care services for the elderly and disabled.

The funding is set to benefit a wide range of businesses, especially those with up to 250 employees and an annual turnover of no more than €50 million. Additionally, Faktoro will receive a €1.9 million subordinated loan under the InvestEU Capacity Building Investment (CBI) programme, which will further enhance its capacity to support micro and social enterprises.

Algirdas Gutauskas, CEO of Faktoro, highlighted the transformative potential of the guarantee for facilitating access to financing on more favorable terms, specifically for companies with limited collateral. He pointed out the unique role of microfinance in enabling small enterprises to obtain funding without collateral requirements, underscoring the innovative nature of Faktoro’s initiatives, such as backing socially impactful projects including sign language translation services and community sports facilities.

EIF Chief Executive Marjut Falkstedt commented on the timeliness and strategic focus of the agreement, praising Faktoro’s dedication to advancing social enterprises. This aligns with the European Union’s broader goals of fostering inclusive growth and social innovation. The InvestEU guarantee also builds upon Faktoro’s previous involvement with the European Guarantee Fund (EGF) and the Employment and Social Innovation (EaSI) programme, which have both facilitated crucial funding amidst challenging economic conditions, including the COVID-19 pandemic.

Background information

Faktoro has been operating in the non-banking financing market since 2016. It is one of the pioneers of non-banking financing and one of the largest non-banking financiers in Lithuania, providing exceptional specialised business financing services to small and medium-sized enterprises in the Baltic states and Finland.

The European Investment Fund (EIF) is part of the European Investment Bank Group. Its central mission is to support Europe’s small and medium-sized enterprises (SMEs) by helping them access finance. The EIF designs and develops venture and growth capital, guarantees and microfinance instruments that target this market segment. In this role, the EIF advances key EU policy objectives including competitiveness, growth, human capital and climate action.

The InvestEU programme provides the European Union with long-term financing by mobilising public and private funds for a sustainable recovery. It generates additional investments in line with EU priorities such as the European Green Deal, the digital transition and support for small businesses. A range of EU financial tools is brought together to support investment with simpler, more efficient and more flexible project financing. The programme has three components: the InvestEU Fund, the InvestEU Advisory Hub and the InvestEU Portal. The InvestEU Fund is implemented via various financial partners. They invest in projects by using an EU budget guarantee of €26.2 billion to mobilise at least €372 billion in extra investments.

Press contacts

EIB Group:
Kristiina Randmaa, tel.: +352 4379 72894 — k.randmaa@eib.org
Follow us on Twitter@eif_eu
Website: www.eif.org — press@eib.org

Faktoro:
Justė Mikelaitė, tel.: +37067549888, juste@faktoro.lt

SOURCE: European Investment Fund