Taiwanese and Lithuanian state financial institutions have signed an agreement to guarantee loans to Lithuanian importers of Taiwanese products, the Ministry of Economic Affairs said yesterday.

The agreement was signed on August 23 by the Export-Import Bank of the Republic of China (Eximbank, 輸出入銀行) and Investment and Business Guarantees Ltd (INVEGA).

Under the agreement, INVEGA will provide loans to small and medium-sized enterprises (SMEs) in Lithuania for the purchase of Taiwanese products, while Eximbank will guarantee up to 70 percent of the loan amount, the ministry said.

Photo: Ann Wang, Reuters

Eximbank helps boost Taiwan’s import and export trade by offering financial services such as export credit insurance and extending lines of credit to domestic and foreign financial institutions, which then lend the funds back to their customers for imported goods. Taiwanese.

INVEGA’s main objectives include the provision of financial services and support to SMEs, with the main objective of facilitating their access to finance.

The deal marks Eximbank’s first pact with a foreign financial institution on loan guarantees.

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

Under the agreement, when a Taiwanese exporter receives an order from a Lithuanian importer, the latter will be referred to INVEGA for access to financing, if necessary, the ministry said.

Taiwanese exporters will be offered a guarantee of up to 90 percent of the loan amount to purchase raw materials for the production of goods to ship to their clients in Lithuania, he said.

In a separate statement, Eximbank said it would also provide customized loan guarantees to Lithuanian companies, while assuming some of the export risks for Taiwanese exporters, according to the deal.

The deal is expected to provide incentives for Lithuanian importers to buy more Taiwanese products, which will help boost Taiwan’s exports, Eximbank said.

The deal is backed by the Ministry of Economy, the National Development Council, the Ministry of Foreign Affairs, the Financial Supervision Commission and the Taiwanese Representative Office in Lithuania, the bank said.

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

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

In the first six months of this year, Taiwan’s exports to Lithuania grew 15.29 percent from a year earlier to US$64.42 million, the Eximbank said, citing data from the Customs Administration.

Last year, Taiwan’s imports from Lithuania rose 20.91 percent year on year to about $132 million, the bank said.

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