OREANDA-NEWS. January 09, 2013. Upon signing an open credit line agreement with UAB Investiciju ir verslo garantijos (INVEGA), performing the functions of INVEGA Fund management, Ukio bankas will extend loans from the Open Credit Fund (OCF) in accordance with the updated lending terms and conditions. Loans from the OCF are eligible for small and medium-sized enterprises, reported the press-centre of Ukio Bankas.

“Upon changing some terms and conditions for the extension of loans from the OCF banks will be able to lend OCF resources to small and medium-sized businesses for a duration longer than that provided previously, whereas the decreased cost of lending will contribute to business development in Lithuania,” INVEGA Director Audrius Zabotka said.

Ukio bankas has gained extensive experience of working with small and medium-sized enterprises and boasts a thorough knowledge of the needs of this business segment. The agreement signed with INVEGA on the basis of elaborated terms and conditions will make it possible to grant loans to SMEs with the state guarantee under yet more favourable conditions, thus ensuring the sustainability of their activities as well as their growth,” Arnas Zalys, the Chairman  of Ukio bankas Board, said.

As maintained by Mr Zalys, the state guarantee allows enterprises, which do not have or have insufficient assets to pledge to a bank and secure credit repayment, to receive loans. The state guarantee also makes it possible for enterprises to save as part of the interest may be compensated. The purpose of credits granted from the INVEGA Fund resources intended for the implementation of the measure “Open Credit Fund” – for investments and/or working capital. The maximum credit amount is LTL 2 million (or the equivalent in euro). Credit repayment term – not later than by 31 December 2018. One enterprise may receive a maximum of two loans during a twelve-month period. Interest on credit is variable: when borrowing in litas – 3 months VILIBOR plus margin (not higher than 3.1 %), but not more than 8 % of the annual interest; for loans in euro – 3 months EURIBOR plus margin (not above 3.1 %), but not more than 6 % of the annual interest. To secure credit repayment, real estate or other property can be pledged, guarantees from INVEGA are accepted; while the interest paid is compensated.

At the end of November of 2012 lending agreements concluded with small and medium-sized business represented more than 90 % of the total credit agreements at Ukio bankas. “Small and medium-sized enterprises are particularly active, search for their own niches and make every effort to achieve their goals. This year, too, we see SMEs as the driver of the economy and therefore we hope that lending to these enterprises will reasonably grow,” maintains Mr Zalys.

Ukio bankas took part in a selection procedure for the implementation of the finance engineering facility OCF launched in August 2012. An additional amount of LTL 50 million was allocated to the Open Credit Fund and currently it totals LTL 150 million. The time limit for using OCF resources is set until 31 December 2018.

Ukio bankas is Lithuania’s first commercial bank having provided financial services via its wide client service network, with more than 60 units all over the country, for a third decade already. Ukio bankas maintains close cooperation relationships with business enterprises by providing them with relevant financial solutions and proposals. The bank in particular focuses on small and medium-sized business and enterprises working in the regions of the country.

The Open Credit Fund if the financial engineering facility “Open Credit Fund” (OCF) of the INVEGA FUND set up from the resources of the European Regional Development Fund in April 2009. The aim of the OCF is to conclude open credit line agreements with the selected banks which, upon adopting a decision to grant a credit conforming to the set requirements, submit a request to INVEGA for reservation of OCF resources for the financing of a small and medium-sized entity (a maximum of 75 % of the credit amount). Credits from OCF resources may be granted by the banks selected by INVEGA to small and medium-sized entities for investments or supplementation of working capital. The share of OCF resources in the credit granted by a bank to a SME must not exceed 75% and LTL 1.5 million.