CEB support for Lithuanian MSMEs to contribute to COVID-19 economic recovery
27 September 2021
PARIS – The Council of Europe Development Bank (CEB) has approved a € 4 million loan to the Lithuanian Central Credit Union (LCCU) to support job preservation and creation, and promote economic growth by facilitating access to financial resources for micro, small and medium-sized businesses (MSMEs).
MSMEs are essential for the economy in Lithuania as they employ 75.9 per cent of the Lithuanian workforce and generate 59 per cent of the domestic export of goods. Yet, access to credit has been one of the main obstacles to their growth.
“As everywhere across Europe and globally, MSMEs in Lithuania were disproportionately hit by the COVID-19 pandemic,” reminded CEB Governor Rolf Wenzel. “We at the CEB expect this loan to help bolster their growth potential, promote entrepreneurship and create and preserve jobs in the country.”
This loan marks a new type of cooperation for the CEB. By providing funds to the LCCU, the CEB will enable access to financing for MSMEs through local credit unions (members of the LCCU Group) across the country. Credit unions play important role in Lithuania, especially in the light of existing challenges to access traditional bank financing.
In addition to being relevant for recovery in the COVID-19 context, the loan has a high potential for replication across the Baltic region.
Most loan final beneficiaries are expected to be micro and small enterprises, but the LCCU can also provide direct loans to relatively larger sub-projects in the form of syndicated loans co-financed by LCCU and its member credit unions.
Lithuania joined the CEB in January 1996. It has received funds from the Bank in the field of energy efficiency, emergency healthcare, education for all, sustainable mobility, upgrade of essential water and wastewater services, migrant and refugee integration, and social housing. More information is available here.
Set up in 1956, the CEB (Council of Europe Development Bank) has 42 member states. Twenty-two Central, Eastern and South Eastern European countries, forming the Bank's target countries, are listed among the member states. As a major instrument of the policy of solidarity in Europe, the Bank finances social projects by making available resources raised in conditions reflecting the quality of its rating (Aa1 with Moody's, outlook stable, AAA with Standard & Poor's, outlook stable, AA+ with Fitch Ratings, outlook positive and AAA* with Scope Ratings, outlook stable). It thus grants loans to its member states, and to financial institutions and local authorities in its member states for the financing of projects in the social sector, in accordance with its Articles of Agreement.