Taiwanese and Lithuanian financial institutions sign loan guarantee agreement

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Taipei, Sep 6 (CNA) Two public financial institutions in Taiwan and Lithuania have signed an agreement to guarantee loans to Lithuanian importers of Taiwanese products, the Ministry of Economic Affairs (MOEA) announced on Tuesday.

Under the agreement signed between the Export-Import Bank of the Republic of China (Eximbank) and Investment and Business Guarantees Ltd. (INVEGA), a mechanism will be put in place to fund these importers, especially small and medium enterprises, the ministry said in a statement.

INVEGA will provide loans to Lithuanian SMEs for the purchase of Taiwanese goods, while Eximbank will guarantee up to 70% of the loaned amount, the ministry said.

Eximbank generally helps boost Taiwan’s import and export trade by offering financial services such as export credit insurance and providing lines of credit to domestic and foreign financial institutions, which then on-lend the funds to their customers for importing Taiwanese products.

In Lithuania, the main objectives of INVEGA are to provide financial services and support to SMEs, with the main aim of facilitating their access to finance.

The agreement between the two public entities was signed on August 23, marking Eximbank’s first pact with a foreign financial institution on loan guarantees, according to the MOEA.

The ministry said it would provide financing to Eximbank to guarantee INVEGA loans for up to five years, with preferential service charges for Lithuanian SMEs. and provide export insurance for Taiwanese exporters.

Explaining how the deal will work, the ministry said that when Taiwanese exporters receive orders from Lithuanian buyers, the buyers will be referred to INVEGA to access financing, if needed.

Meanwhile, Taiwanese exporters will be able to obtain a guarantee of up to 90% of loans taken to purchase raw materials for the production of goods to be shipped to their customers in Lithuania, the MOEA said.

In a separate statement, Eximbank said it would also provide tailored loan guarantees to Lithuanian companies, while assuming some of the export risks for Taiwanese exporters, as per the agreement.

The deal is expected to encourage Lithuanian importers to buy more Taiwanese products, boosting Taiwanese exports, Eximbank said.

The deal was fully supported by Taiwan’s MOEA, the National Development Council, the Foreign Ministry, the Financial Supervisory Commission and the Taiwanese representative office in Lithuania, the bank said.

Noting that Lithuania is set to open a trade office in Taiwan, Eximbank said the deal would be a congratulatory gift.

In June, Eximbank and INVEGA signed a memorandum of understanding on a loan guarantee scheme, during a visit to Taipei by a Lithuanian delegation led by Deputy Minister of Economy and Innovation Jovita Neliupšie .

In the first six months of 2022, Taiwan’s exports to Lithuania rose 15.29 percent from a year earlier to $64.42 million, Eximbank said, citing administration statistics. Taiwan Customs.

Last year, Taiwanese imports from Lithuania rose 20.91 percent a year to about $132 million, according to the bank.

(By Cheng Huang-ta, Chang Ai and Frances Huang)

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