The program was administered by the European Commission and Lithuania's Small and Medium Business Development Agency. Arvydas Darulis, the agency's director, reported that more than 4,000 Lithuanian entrepreneurs received training or individual consultations. At present, the results of the program have been 40 new jobs, 106 patents and 15 new companies.
While these numbers may seem low, the agency will continue monitoring results for several more months. Darulis believes that the numbers will rise because the effects of the program have yet to fully manifest themselves. Several dozen new companies are in the planning stages at present. "More tangible results are forthcoming," he told reporters at a press conference.
Eugenijus Maldeikis, Lithuania's minister of economy, was also stressing the importance of small business to Lithuania. "This sector has received too little attention in comparison to others," he said. "We continue to experience problems with institutional capacities in this area."
For Maldeikis encouraging small business start-ups, especially those that provide services to larger companies and the government, is vital for growing Lithuania's economy.
"Because we are an export-driven economy, we can create more stable domestic conditions by creating more jobs in this sector," he said.
Dieter Thiel, the EC's representative in Vilnius, agreed with this view. "It will be easier for Lithuania to innovate, create additional employment and bring new products to market in the small and medium business sector than in larger industries," he said.
He also welcomed the recent pro-free enterprise rhetoric of the new Prime Minister Rolandas Paksas's government.
"I hope he and his team will continue extending efforts to help private enterprise," Thiel said.
A continuing problem for Lithuanian entrepreneurs has been a lack of support from Lithuanian banks. The EC will shortly launch a new program with 21 million euros in funding offering financial assistance to small businesses in EU accession countries by offering loan guarantees and some equity investment.
"With a few exceptions, our experience in working together with banks in this area has not been outstanding," Thiel said. "Banks need to play a major role in financing small and medium enterprise."
Eugenijus Maldeikis also stressed the importance of micro credit lines for small businesses in Lithuania. "Money is not the only thing, though. Through this program our small business people have begun to learn the international language of business. The skills acquired are difficult to put a price on as they are intangibles," he said.
According to a report in the Veidas weekly news magazine, many small businesses have been applying to the banks for financing and were doing so even during the depths of the 1999 recession. Bank experts felt that many of the business plans presented were not properly prepared to warrant approving the loans, even though many were in low-risk sectors such as plywood production.
The problem for small businesses is that banks require too high of a security deposit and have difficulty finding assets with which to guarantee the loans. Another difficulty has been banks' skepticism about loan guarantees provided to borrowers by Lithuania's state-owned Lithuanian Export and Import Insurance Corporation.