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EBRD and Šiauliu Bankas support agribusiness in Lithuania
A €2 million loan from the European Bank for Reconstruction and Development to Šiauliu Bankas, the sixth-largest bank in Lithuania, is expected to support the country's agribusiness sector. Under the agreement, Šiauliu Bankas will use the EBRD financing to extend loans to farmers, traders and food processors who wish to use grain as collateral.
It is the first EBRD loan of this type in Lithuania. The Bank expects to extend its agribusiness lending next year, when a new harvest season begins, with a broader warehouse receipts programme and is currently working with the Ministry of Agriculture to develop a legal framework to facilitate that programme.
Using grain as collateral for bank loans will greatly improve liquidity in the agribusiness sector, said Jean Lemierre, President of the EBRD, who signed the loan agreement in Šiauliai today. This type of facility can stabilise grain prices by reducing the pressure to sell grain at harvest when prices are usually at their lowest.
Algirdas Butkus, Chairman of the Board of Siauliu Bankas, said: "We are pleased to be working together with the EBRD towards the successful implementation of this programme. We strongly believe that this new product for the bank will encourage further growth for our agribusiness customers."
With this facility the EBRD is expanding its relationship with Šiauliu Bankas. Currently, the two institutions are working together under the SME Finance Facility, established in 1999 to support the growth of entrepreneurs and small businesses in the 10 EU accession countries in central and eastern Europe.
Šiauliu Bankas was established in 1991 in Šiauliai, in north western Lithuania. With 22 branches and client service centres throughout Lithuania, the bank also provides a full range of banking services to small and medium-sized companies.
To date, the EBRD has signed over 100 projects worth more than €2 billion to assist the agribusiness sector throughout the Bank's countries of operations.
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