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COVID-19 EU PolicyWatch

Database of national-level responses

Eurofound's COVID-19 EU PolicyWatch collates information on the responses of government and social partners to the crisis, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for case LT-2020-12/340 – measures in Lithuania

Compensation for interest on loan or lease payments

Palūkanų kompensacija paskolos mokėjimo atidėjimo laikotarpiu

Country Lithuania , applies nationwide
Time period Temporary, 16 March 2020 – 31 December 2020
Type Legislations or other statutory regulations
Category Supporting businesses to stay afloat
– Direct subsidies (full or partial)
Author Inga Blaziene (Lithuanian Social Research Centre) and Eurofound
Case created 07 April 2020 (updated 15 October 2020)

Background information

Taking into account the companies’ lack of working capital during the quarantine period, the Government allocated €23 million of EU funds to fully reimburse interest payable by small- and medium-sized enterprises in cases where the repayment of loans or financial leasing has been postponed for at least 3 months after 16 March 2020 due to the quarantine regime. The businesses, therefore, can use their savings for other important purposes. The measure is implemented in accordance with Description 1 of the conditions for financing projects under measure J03-IVG-T under priority axis 3 “Promoting the competitiveness of small- and medium-sized enterprises” and priority axis 4 “Promoting energy efficiency and the production and use of renewable energy” under the Operational Programme for EU Structural Funds Investments for 2014-2020, as supplemented on 3 April 2020 by the Order No. 4-201 of the Minister for the Economy and Innovation.

Content of measure

Representatives of small- and medium-sized enterprises experiencing difficulties in relation to COVID-19 pandemic may apply for the reimbursement of interest on deferred loans or financial leasing payments by the National Development Agency “Investicijų ir verslo garantijos” (Investment and Business Guarantees, INVEGA). If the financial institution defers the payment of loans or financial leasing, the borrowers will be reimbursed 100% of interest payable during the period of deferral. In addition, interest compensations will be paid on a monthly basis instead of a quarterly basis. The interests will be reimbursed in respect of investment and working capital loans, as well as financial leasing agreements, provided that the company meets certain criteria (e.g., interest compensation during the deferral period is not available for companies engaged in road freight transport wishing to purchase vehicles for freight transportation; for farmers; in respect of overdrafts, credit lines, factoring, operating lease contracts, etc.). The interest rate from which the maximum amount of partial reimbursement of interest is calculated shall not exceed 7%. The reimbursement of interest shall be applied within the de minimis aid ceiling (€200,000) for a period exceeding six months – until 31 December 2020.

Use of measure

According to the data provided by INVEGA, a total of 4,642 applications for compensation for interest on loan or lease payments amounting to €31.2 million have been submitted by 24 September 2020, of which 55 are being processed, 497 – returned for being revised, 1,031 – denied, and 3,059 – approved.

Target groups

Workers Businesses Citizens
Does not apply to workers SMEs
Does not apply to citizens

Actors and funding

Actors Funding
National government
Employers' organisations
Company / Companies
Public support service providers
European Funds

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role Consulted Consulted
Form Direct consultation outside a formal body Direct consultation outside a formal body

Social partners' role in the implementation, monitoring and assessment phase:

  • Unknown
  • Main level of involvement: Unknown

Involvement

No information available.

Views and reactions

Social partners consulted only ad hoc, the tripartite meeting was not held.

Sources

  • 03 April 2020: LR ekonomikos ir inovacijų ministro įsakymas Nr. 4-201 (2020-04-03) (e-seimas.lrs.lt)

Citation

Eurofound (2020), Compensation for interest on loan or lease payments, case LT-2020-12/340 (measures in Lithuania), COVID-19 EU PolicyWatch, Dublin, http://eurofound.link/covid19eupolicywatch

Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process. All information is preliminary and subject to change.