InvestEU-backed programme to benefit micro-enterprises in Lithuania, Latvia and Poland with up to €50,000 loans

InvestEU-backed programme to benefit micro-enterprises in Lithuania, Latvia and Poland with up to €50,000 loans

(IN BRIEF) The European Investment Fund (EIF) has signed a portfolio guarantee agreement with Noviti Finance to lend almost €47 million to micro-businesses in Lithuania, Latvia, and Poland on preferential terms. The EIF guarantee is provided under the European Union’s InvestEU programme and is expected to enable around 2,640 microloans to be signed under the programme. Micro-enterprises with up to ten employees and annual revenues of up to €2 million will be able to borrow up to €50,000 for investment and working capital purposes without pledging any assets in some cases. Noviti Finance has successfully disbursed loans under two previous agreements with the EIF, with the first €10 million guarantee deployed within 16 months, and last year’s guarantee of €12.5 million disbursed within a year.

(PRESS RELEASE) LUXEMBOURG, 13-Apr-2023 — /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), and Noviti Finance, Lithuania’s alternative non-bank business financier, have signed a portfolio guarantee agreement under which almost €47 million will be lent on preferential terms to micro-businesses in Lithuania, Latvia, and Poland.

This EIF guarantee, provided under the European Union’s InvestEU programme, will benefit micro-enterprises with up to ten employees and annual revenues of up to €2 million, allowing them to borrow up to €50 000 without pledging any assets in some cases. Loans will be granted for both investment and working capital purposes, with a total of around 2 640 microloans expected to be signed under this programme.

Under two previous agreements with the EIF, Noviti Finance disbursed loans to micro-enterprises in a much shorter timeframe than anticipated, with the first guarantee of €10 million in 2020 deployed within 16 months, and last year’s guarantee of €12.5 million disbursed within a year. As many as 1 305 companies received concessional finance under this agreement.

Noviti Finance has also recently started providing business loans in Poland, where it plans to finance more than 200 small businesses and distribute €3 million in loans this year.

In Lithuania, small and medium-sized businesses borrowed, on average, for 27 months last year, with the average loan amount issued at around €16 000. In Lithuania, 75% of all loans granted by Noviti Finance were guaranteed by the EIF, and in Latvia, the percentage was even higher at 91%.

“This new agreement with Noviti Finance, backed by the InvestEU programme, will support micro-businesses that struggle with traditional lending and are faced with different financial pressures today. We are especially proud that besides going to Lithuania and Latvia, part of the lending will be channelled to the Polish market which is currently underserved in terms of financing to small businesses and micro-enterprises,” said EIF Chief Executive Marjut Falkstedt.

CEO of Noviti Finance Linas Armalys welcomed the fact that the new guarantee will open up the possibility for even more companies to obtain finance on more favourable terms. “Micro-enterprises with up to ten employees account for 84% of all small businesses operating in Lithuania. However, they are the ones that have most difficulty accessing finance. Small businesses have much smaller needs and often have no tangible assets to pledge. The situation is similar in neighbouring countries such as Latvia and Poland. In all three countries, this programme will make a significant contribution to the availability of finance for small businesses.”

European Commission Executive Vice-President for an Economy that Works for People Valdis Dombrovskis said: “InvestEU plays a crucial role in helping small EU businesses get the financing they need to grow, innovate and create jobs. Thanks to today’s new InvestEU agreement, micro-businesses in Lithuania, Latvia and Poland will benefit from loans that are tailored to their needs. This will enable them to overcome the obstacles they face in accessing finance so that they can reach their full potential.”

“The last few years have been difficult for business, but it is encouraging that companies are adapting quickly to the changing environment and are actively applying to us for financing,” adds Armalys.

About Noviti Finance

Noviti Finance has been operating on the market since 2016. During this period, the company has financed more than 3 500 companies in the Baltic States, where Noviti Finance actively contributes to the promotion of small businesses. In Lithuania, Noviti Finance is an official partner of Invega and also lends to small businesses through the EIF’s InvestEU programme. During the COVID-19 pandemic, Noviti Finance actively implemented state support measures for businesses and was the second largest financier in terms of “Loans to businesses most affected by COVID-19”.

About the EIF

The EIF is part of the European Investment Bank Group. It supports Europe’s small businesses by improving their access to finance through a wide range of selected financial intermediaries, such as banks, guarantee and leasing companies, micro-credit providers and private equity funds. The EIF designs and offers equity and debt financing instruments fostering EU objectives in support of entrepreneurship, growth, innovation, research and development, the green and digital transitions and employment.

About InvestEU

The InvestEU programme provides the European Union with crucial long-term financing by mobilising significant public and private funds to support a sustainable recovery. It helps generate additional investments in line with key European priorities, such as the European Green Deal, the digital transition and support for small businesses. The InvestEU programme brings together a multitude of EU financial tools and has three components: the InvestEU Fund, the InvestEU Advisory Hub and the InvestEU Portal. The InvestEU Fund is implemented via various financial partners. They will invest in projects by using an EU budget guarantee of €26.2 billion to mobilise at least €372 billion in additional investments.

Press contacts

EIB Group:

Kristiina Randmaa, tel.: +352 4379 72894 — k.randmaa@ext.eib.org
Follow us on Twitter@eif_eu
Website: www.eif.org — Press Office: +352 4379 21000 — press@eib.org

Noviti Finance:

Ernesta Vinevičiūtė, tel.: +370 682 32100 — ernesta@noviti.lt
Website: www.noviti.lt

SOURCE: European Investment Fund