EU – Baltic States, Financial Services, Lithuania

International Internet Magazine. Baltic States news & analytics Friday, 04.12.2020, 13:40

EU and Helenos back microfinance in Lithuania through investments in the Lithuanian Central Credit Union

BC, Vilnius, 24.09.2020.Print version
The EIF and Helenos, a private equity fund managed by Inpulse, will strengthen the capacity of the Lithuanian Central Credit Union (LCCU) through two investments totalling EUR 3mln. The EIF investment is backed by the European Union under the capacity building’ window of the EU programme for Employment and Social Innovation (EaSI). The financing will support LCCU’s digital infrastructure, risk management and IT system, to strengthen its capital base and scale-up its micro-lending activities in Lithuania.

With EU-backing, some EUR 3 mln will become available for the Lithuanian Central Credit Union to strengthen its position and capacity in providing credit to Lithuanian small and micro-businesses. Under the ‘Capacity Building Investments’ window of the EU’s programme for Employment and Social Innovation (EaSI) the European Investment Fund (EIF) will invest EUR2 mln in the LCCU, with the private equity fund Helenos investing a further EUR 1 mln. The LCCU is an institution with a strong social mission, dedicated to serving a particularly vulnerable target group: small and micro-enterprises in the agricultural sector and rural areas in Lithuania with limited access to traditional bank finance.


The LCCU, together with its network of 48 credit unions (the "LCCU Group"), is an important financier of these micro-enterprises in Lithuania. 50% of its clients are women and it has a strong regional outreach with its 48 credit unions covering the entire country. The LCCU has also developed a dedicated microloan product catering for start-ups and complements its financial offering with non-financial services such as tailored support in business plan drafting.


European Commissioner for Jobs and Social Rights, Nicolas Schmit, said: “The past months have shown us how important it is to invest in our local economies and support small businesses hit hard by the Covid-19 pandemic. Therefore, I welcome this agreement under the EU Programme for Employment and Social Innovation which will enable the Lithuanian Central Credit Union to provide financing to even more microenterprises in Lithuania’s agricultural sector, as well as offering them crucial advisory services.”.


“Small businesses have always been struggling with traditional bank finance, and the economic fallout of the COVID 19 pandemic might further deteriorate their access to finance,” said EIF Chief Executive Alain Godard  “That is why we are particularly glad about this agreement. It strengthens LCCU as an important financier of micro enterprises in the rural areas of Lithuania, with many of its clients being women entrepreneurs, and will help to scale up the accessible financing for their clients considerably.”


“Through this investment, Helenos is glad to support LCCU in this period of the coronavirus crisis, when access to financial services becomes especially important for micro entrepreneurs and their families. With 60% share of the national credit union sector and thanks to forward-thinking management, guided by best cooperative principles, the LCCU group is well positioned to continue the development and to provide well-tailored services to poorer households in Lithuania over the next decade.” said Nicolas Blondeau, manager of Helenos, fund managed by Inpulse, Impact Manager based in Brussels.


“By providing subordinated loans, well-known financial institutions in Europe will contribute to the smooth development of this sector in Lithuania. We have the potential to grow and become even closer to our customers, while recent events have confirmed that our international partners trust in the validity of this vision. We are pleased with the confidence shown, which builds preconditions for sustainable growth of the LCCU Credit Union Group,” said Mindaugas Vijūnas, Chief Executive Officer and Chairman of the Board of LCCU.


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