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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-2020-16/359 Updated – measures in Lithuania

Soft loans to provide liquidity in the most affected sectors

Lengvatinės paskolos likvidumui palaikyti labiausiai paveiktiems sektoriams

Country Lithuania , applies nationwide
Time period Temporary, 16 April 2020 – 31 July 2020
Type Legislations or other statutory regulations
Category Supporting businesses to stay afloat
– Access to finance
Author Inga Blaziene (Lithuanian Social Research Centre) and Eurofound
Case created 07 April 2020 (updated 04 January 2021)
Related ERM support instrument

Background information

The National Development Agency (INVEGA) plans to provide soft loans to companies through financial institutions to maintain companies’ liquidity. Loans are granted to companies if the turnover has fallen by more than 60% as a result of the COVID-19 pandemic. The terms and conditions of loans are regulated by the regulations on the provision of guarantees for small and medium business loans, as approved by Order No 4-188 of the Minister for the Economy and Innovation of the Republic of Lithuania of 27 March 2020, and the Scheme of the financial instrument “Loans to the businesses most affected by COVID-19” approved by Order No 4-229 of the Minister for the Economy and Innovation of the Republic of Lithuania of 15 April 2020.

Content of measure

The measure is targeted at small- and medium-sized businesses operating in the most affected sectors, i.e. where activities are completely banned and there is no turnover or it has fallen by more than 60%. The size of the loan will be limited to the amount needed to cover the company's necessary expenses. The financial institution will calculate how much money the company needs to survive (for salaries, rent, etc). for the period from 16 March 2020 to 31 July 2020 and will pay that amount to the company. Business entities will start repaying the loan 6 months after receiving the loan. The maximum amount of the loan is of €100,000. The company will pay a fixed interest rate depending on the duration of the loan - 0.1% for the loans shorter than 12 months, 0.19% - for the loans that will be repaid in 13 - 36 months.

Updates

The following updates to this measure have been made after it came into effect.

07 June 2020

As of 7 June 2020, the original amount of €50 million earmarked for such loans was increased to €200 million taking into account the need for the measure.

25 April 2020

As of 25 April 2020, the eligibility criteria for the support have been changed. Currently the eligibility criteria for the support are the following:

  1. the monthly turnover of the company decreased by 30% as compared to the average monthly turnover in 2019 (i.e. the monthly turnover of the borrower after 16 March 2020 is compared with the average monthly turnover in 2019);
  2. the company has retained at least 50% of the employees compared to the number of employees on 1 March 2020.
  3. The company will pay a fixed interest rate depending on the duration of the loan:
    • 0.1% for the loans shorter than 12 months;
    • 0.19% for the loans that will be repaid in 13-36 months;
    • 0.69% for the loans that will be repaid in 37-72 months. Also, as of 25 April 2020, the maximum amount of the loan was increased from €100,000 to €1,000,000

Use of measure

According to the data provided by the Ministry of the Economy and Innovation of the Republic of Lithuania, during the period from 16 April 2020 to 31 July 2020, €200 million was disbursed in loans through financial intermediaries. The loans were accessed by 3,462 legal entities and entrepreneurs of the country.

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

  • 27 March 2020: LR ekonomikos ir inovacijų ministro įsakymas Nr. 4-188 (2020-03-27) (e-seimas.lrs.lt)
  • 14 April 2020: Invega informacija (invega.lt)
  • 15 April 2020: Order No 4-229 of the Minister for the Economy and Innovation of the Republic of Lithuania (LR ekonomikos ir inovacijų ministro įsakymas Nr. 4-229 (e-seimas.lrs.lt)
  • 24 April 2020: Order No 4-250 of the Minister for the Economy and Innovation of the Republic of Lithuania (Lietuvos Respublikos ekonomikos ir inovacijų ministro įsakymas Nr. 250 (www.e-tar.lt)
  • 06 June 2020: Order No 4-416 of the Minister for the Economy and Innovation of the Republic of Lithuania (Lietuvos Respublikos ekonomikos ir inovacijų ministro įsakymas Nr. 4-416 (www.e-tar.lt)

Citation

Eurofound (2020), Soft loans to provide liquidity in the most affected sectors, case LT-2020-16/359 (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.