WASHINGTON, D.C., June 30, 1999 – The International Finance Corporation today agreed to a loan of US$20 million to Vilniaus Bankas, the largest private bank in Lithuania, for on-lending to small- and medium-size enterprises (SMEs) and to meet the growing demand for housing finance.
The loan, with a final maturity of seven years, will ease the shortage of medium-term funding for smaller businesses and help finance mortgages for residential housing.
The loan will bolster the development of Lithuania's banking sector, said Mr. Harold Rosen, Director of IFC's Central and Southern Europe Department. The long-term IFC loan extends the maturity of Vilniaus Bankas' funding base and recognizes the progress that Vilniaus Bankas has made in improving its loan quality, risk management procedures and operational efficiency, he said. The project would support SMEs by channeling additional funds for longer maturities and improve living standards by expanding long-term mortgages to homebuyers, Mr. Rosen added.
Mr. Julius Niedvaras, Chairman of Vilniaus Bankas, said that the bank plans to increase its resource allocation to the SME sector and retail banking. The IFC loan would enable Vilniaus Bankas to grant more long-term loans, with maturities of two to seven years, for project finance by SMEs that are private companies with less than LTL 60 million (US$15 million equivalent) in total assets. The IFC loan will also enable Vilniaus Bankas to satisfy the growing need for long-term mortgage loans with maturity of four to seven years.
The mission of IFC, part of the World Bank Group, is to promote private sector investment in developing countries, which will reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses.
