Finance availability for small and medium-sized enterprises in Lithuania

Abstract

The finance gaps in the small and medium-sized enterprise (SME) market create competitive disadvantage due to SMEs inability to raise their finance. The problem emerged because of banking development oriented to delivery of large-scale, low risk and cost-cutting financial services, though just some banks have developed retail banking and close relationships with SMEs. The Lithuanian public policy harmonized with basic aims pursued in EU started to stress the importance of improving relations between financial institutions and SMEs. This interest reflects the need for shift from transactional orientation to long-term interactive relationship among SMEs and financial institutions in order to improve the information transfer, the importance to find the most effective relationship intermediaries and measures to induce the larger finance flows to SMEs sector.