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 Aug. 23 by the Export-Import Bank of the ROC (Eximbank, 輸出入銀行) and Investment and Business Guarantees Ltd (INVEGA).
Under the deal, INVEGA would provide loans to small and medium-sized enterprises (SMEs) in Lithuania for the purchase of Taiwanese goods, while Eximbank would 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 credit lines to domestic and foreign financial institutions, which then relend the funds to their clients for the importation of Taiwanese products.
INVEGA’s main objectives include providing financial services and support to SMEs, with the primary goal of facilitating their access to funding.
The agreement marks Eximbank’s first pact with a foreign financial institution on loan guarantees.
The ministry said it would provide funding to Eximbank to guarantee INVEGA loans for up to five years, with preferential service fees 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 would be referred to INVEGA to access funding, if necessary, the ministry said.
Taiwanese exporters would be offered a guarantee of up to 90 percent of the loan amount to buy raw materials for the production of goods for shipment to their customers in Lithuania, it said.
In a separate statement, Eximbank said it would also provide tailored loan guarantees to Lithuania businesses, while shouldering some of the export risks for Taiwanese exporters, in accordance with the agreement.
The agreement is expected to provide incentives for Lithuanian importers to buy more Taiwanese products, helping boost Taiwan’s exports, Eximbank said.
The deal is backed by the economics ministry, the National Development Council, the Ministry of Foreign Affairs, the Financial Supervisory Commission and the Taiwanese Representative Office in Lithuania, the bank said.
Noting that Lithuania is poised to open a trade office in Taiwan, Eximbank said the agreement would be a congratulatory gift.
Eximbank and INVEGA signed a memorandum of understanding on a loan guarantee system in June, during a visit to Taipei by a Lithuanian delegation led by Vice Minister of the 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, Eximbank said, citing Customs Administration data.
Last year, Taiwan’s imports from Lithuania rose 20.91 percent annually to about US$132 million, the bank said.
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