Instead of a lifeline, new questions: what's happening with ILTE?

Conflict of interest or help?

I. Jankauskas claims to have come across at least one specific case where a farmer was advised not to take advantage of the loans available on the market at the time and to wait for a product offered by ILTĖ.

„It was suggested not to take out a loan with interest compensation but to wait for their product. This is a conflict of interest in a way – you are both giving guarantees and lending yourself“, – he says.

Although this is – an isolated and unconfirmed case, it raises the question – shouldn't a public authority remain neutral in the market?

Politicians react differently to these concerns. Member of the Seimas Valius Ąžuolas does not see a problem here – on the contrary, he sees such action as a help.

„If a sector is in difficulty, it is natural to say – wait for better conditions. If ILTE communicated in this way, it did well“, – he says. The aim of a public financial institution is to offer the best possible conditions for business, even if that means playing a more active role in the market, the MP said.

However, experts point to another aspect – the ILTE acts in several roles at once: it sets the rules, provides guarantees and starts lending directly. This raises the question of whether the risk of conflict of interest can be avoided in such a situation.

Ministry sees no problem

The Ministry of Finance, which oversees ILTE's activities, indicates that it has no information on possible attempts to influence the market. It is also stressed that an additional assessment of ILTE's activities would only be carried out in the event of a reasonable suspicion, but it does not see any such basis at present. At the same time, it is stressed that ILTE, as a national development bank, may use different forms of financing if there is a shortage of funding in the market.

However, according to I. Jankauskas, the biggest change in the market in recent times – is the sharp decrease in the provision of guarantees.

„Guarantee provision is at historic lows. The question is whether we will now go from bad to worse“, – he wonders. Farmers today, he says, are faced with a difficult choice between a guaranteed bank loan and a product offered by ILTE, whose terms – although attractive – have their own drawbacks. One of them – the same short loan schedule, the other – financial indicators that are not quite right for agriculture.

Are competition rules being broken – or are they not?

Additional context is provided by the Competition Council, which assessed the measure itself. According to Eglė Malonytė, Head of the Competition Policy Group of the Competition Council, the new loan scheme does not formally infringe the competition rules, as it is only intended for cases where financing is not available on the market.

„Such customers have to provide a no-financing certificate from the financial institution, as these loans are not intended to compete with banks or other financial institutions“, – she says. At the same time, however, the authority stresses another important consideration – the role of the state in the market needs to be extremely cautious.

„Public authorities must avoid potential conflicts of interest and ensure equal treatment of market participants“, – stresses E. Malonytė.

In other words, although the measure itself is considered legal, the question of its implementation practices and communication on the market remains open.

Norėdami komentuoti prisijunkite prie facebook