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International Internet Magazine. Baltic States news & analytics Friday, 20.09.2019, 23:38

Uniting finances and innovation: fintech hub in Lithuania with the EBRD’s support

Eugene Eteris, European Studies Faculty, RSU, BC International Editor, Copenhagen, 09.07.2019.Print version
The idea of connecting fintech and innovation has been practically realised in the EBRD-Swedbank/Lithuania and Estonian accelerator’s partnership. It has been launched recently to develop a successful innovation hub that would foster technological solutions both in Lithuania and other two Baltic States using new financial instruments.

The hub, called Rockit, will promote fintech and tech-centric innovation and contribute to Lithuania’s goal of becoming a leading regional fintech centre in Europe. Through the partnership, the EBRD will facilitate start-up access to operational facilities, to early stage funding and to superior mentoring network as well as to support the development of new initiatives at the hub.


Another leading Estonia-based business-to-business accelerator in Europe, Startup Wise Guys, is also taking part with Swedbank to support the newly re-launched hub. They will seek to foster development by providing seed capital, office space and growth guidance. Rockit’s predecessor, Rise Vilnius, was established in 2016 by Barclays Group Operations Centre Lithuania and now acquired by Swedbank with the aim to strengthen the national startup sector.  


Bottom-line: the three partners: EBRD, Swedbank Lithuania and Startup Wise Guys agreed to support startups in Lithuania; Rockit hub would foster fintech and tech-focused innovative solutions; the “partnership” in general is expected to strengthen the innovative sector and would help to activate the Lithuanian position as a regional fintech leader.


Supporting startups: the EBRD’s role

The EBRD has been working in Lithuania since 1991; since then, it invested €877 mln in 90 projects. The EBRD’s priorities in the country are to strengthening Lithuania’s regional and global competitiveness through engagement in advanced technologies as well as developing capital markets and the circular and green economy.


Hence, the EBRD’s role in Baltics’ progressive growth is fundamental; the EBRD is a multilateral bank that promotes the development of the private sector and entrepreneurial initiative in 38 different global economies across three continents.

The Bank is owned and financed by 68 countries as well as the EU and the EIB. 


EBRD investments are aimed at making the economies in the member states and regions competitive, inclusive, well-governed, green, resilient and integrated. Below is a short deliberation of the bank’s approaches to the general and fintech investment:

- As to the “competitive market economy”, the EBRD’s vision is to support the market structures that ensure entrepreneurial competition with having both enough players and rule-making, which makes it easy to enter the market.

- The “capacity’s approach” fosters generating added value by producing more and/or innovate. - Supporting incentives to compete and advance is based on cooperation between the private-sector management and public entities providing the governance that ensures commercially sound decision-making.


More on competitive issues in: https://www.ebrd.com/transition/competitive.html

 

- As to the “inclusive market economy”, the bank’s efforts are to ensure that anyone (regardless of the gender, origin, age, socio-economic conditions, etc.) could have access to labour markets and entrepreneurship; i.e. it’s about increasing economic opportunities, promoting an inclusive market-based system and an efficient allocation of human resources.


More on the transition issue in: https://www.ebrd.com/transition/inclusive.html



EBRD’s good governance’s concept

The general EBRD’s initiatives on governance stem from the bank’s 2014 initiative, which defined the concept of good governance as having two key denominations: the institutions and the processes that these institutions employ.


The EBRD’s concept of “well governed” fully reflects the trend: “governance concerns authority, decision-making and accountability in all domains. At its core, governance is about the quality of institutions and the processes that they support.” 


More in: https://www.ebrd.com/what-we-do/sectors-and-topics/ebd-icg-initiative.html

 

To ensure that the concept is aligned with the EBRD’s mandate, two key pillars are introduced. One is the notion of national or sub- national economic governance, which refers to the institutions and processes that support economic activity and economic transactions on state-wide or sub-national levels.


The other is corporate-level governance, which relates to the system of rules, practices and processes by which companies are directed and controlled. While the latter has already been mainstreamed into the EBRD’s work, the former still offers considerable potential to be further developed in future project and policy work.


More on governance in: https://www.ebrd.com/transition/well-governed.html


Green dimension

At its foundation, the EBRD integrated the environmental dimension into its core constitutive document. The agreement which established the EBRD stipulated that “the Bank is committed to promoting environmentally sound and sustainable development in the full range of its investment and technical cooperation activities.” 


See basic EBRD documents in: https://www.ebrd.com/news/publications/institutional-documents/basic-documents-of-the-ebrd.html


In 2016, the bank explicitly recognized the “green” dimension of environmental sustainability as an integral quality of transition within a sustainable market economy, making plain that economic decisions should reflect the full value of resources to present and future generations.

 

This “green dimension” is in line with the aspirations of the international community, expressed in the UN SDGs and Paris-2015 global agreement on climate change. The “green quality” in the bank’s governance pursues the ambitious green economy transition approach, including necessary financial support of about 40 per cent of total EBRD financing by 2020. This will be achieved by scaling up existing activities (from industrial and municipal infrastructure energy efficiency to renewable energy and sustainable energy financing facilities) and through innovation in environmental financing and policy products.

 

More on “green transition” in: https://www.ebrd.com/transition/green.html;  

General reference: https://www.ebrd.com/transition/integrated.html






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