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EBRD extends credit line to Lithuanian commercial bank
Medium-sized enterprises in Lithuania will benefit from an ECU 8 million credit line provided by the European Bank for Reconstruction and Development (EBRD). The loan will go to Vilniaus Bankas (VB) to increase its medium and long-term lending to the Lithuanian private sector. The agreement was signed yesterday in London.
Ron Freeman, First Vice President of the EBRD, said: “By increasing the lending capability of a major Lithuanian commercial bank, this project will contribute to private sector development by providing the financing that private companies need. The credit line will also help to modernise and reconstruct the banking industry and, by enabling the bank to import capital equipment, enhance the transfer of technology and know-how”.
VB has experienced rapid growth. Its share capital increased to Litas 25 million (ECU 5 million) and its assets totalled Litas 346 million (ECU 70 million) at the end of 1994. Mainly owned by private companies (74 per cent), in terms of share capital and total assets VB is the second-largest private commercial bank in Lithuania.
The bank has developed a wide range of products and services, including short-term commercial and consumer loans as well as medium-term investment credits, mainly from export credit lines. It channelled 24 per cent of Lithuania's imports and 22 per cent of its exports in 1994. VB carries out retail foreign exchange operations as well as trade-related foreign exchange transactions. In addition to its head office in Vilnius, the bank has 12 branches throughout Lithuania.
Up to ECU 1 million of the credit line will be provided by the Baltic Investment Special Fund, which was established in April 1992 between the EBRD and the Governments of Denmark, Finland, Iceland, Norway and Sweden. The fund promotes private sector development through support for small and medium-sized enterprises in Estonia, Latvia and Lithuania.
This is the first EBRD loan to the Lithuanian banking sector. In August 1994 the EBRD invested equity in the Lithuanian Development Bank.
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