Lithuanian finance provider Mano Bankas has signed a portfolio guarantee agreement with the European Investment Fund (EIF) in the context of the Pan European Guarantee Fund (EGF), one of the E emergency measures agreed last year to help European workers and businesses.
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Thanks to the guarantee, Mano Bankas will make available €50 million in new, more advantageous, lending to Mano Bankas customers.
„This is the first joint project between Mano Bankas and the EIF, but we certainly hope that it will not be the last, as the EIF and the European Investment Bank (EIB), the largest shareholder in the EIF, offer a number of relevant and innovative financial instruments that make financing much more accessible to businesses. Especially for small and medium-sized businesses. We hope that this will be the beginning of a long and successful cooperation,” says Aurimas Putna, member of the Board of Mano Bankas.
The Pan-European Guarantee Fund (EGF) was created by the European Investment Bank Group (EIB and EIF) and EU Member States as a Community response to the then new COVID-19 pandemic. It aims to increase access to credit for businesses in the wake of the economic effects of lockdowns and restrictions to contain the COVID-19 outbreak.
"The EGF was initially set up as an emergency measure, to help businesses affected by the pandemic. It allows banks to lend not only to the affected, but also to growing or young businesses, helping them to find their way out of the crisis. We are glad to partner with Mano Bankas in channelling this important funding to recipients in Lithuania.” states Alain Godard, Chief Executive of the European Investment Fund.
Under the terms of the guarantee, each eligible loan included in the portfolio will be guaranteed at 70% of the credit amount. This significantly increases the likelihood of a positive loan decision and reduces the bank's risk, as in the event of a failure, the bank will be able to recover 70% of the potential loss thanks to the EGF. Mano Bankas will independently manage and administer the loan portfolio, and the final decision to provide financing resides with Mano Bankas.
The Mano Bankas portfolio guaranteed by the EIF transaction will amount to €50 million, whereas individual loan amounts will range from €100,000 to €3 million. For financing provided with EGF-backing, credit terms are more favourable than borrowing without a guarantee. Loans may be used for both investment projects, to build or acquire assets, and to finance the turnover of businesses.
"These loans will be cheaper than standard business loans because we want to pass on the benefits of European guarantees to borrowers. Mano Bankas is open for inquiries about the availability of this warranty, and those considering this are welcome to contact us to discuss the options. Traditionally, we are able to delve into the individual situation and needs of companies, looking for the most favourable financing solution, so we will really try to understand and help,” concludes Aurimas Putna. ■