February 24, 2018

Interviewing our Advisor Andrius Nikitinas on Small Business Financing From International Perspective

 

We had an interview with our international business development advisor Andrius Nikitinas. As an Attache for commercial relationships with 3 countries, Andrius represents Lithuania at the highest levels of diplomatic activity including meetings with Heads of State and senior politicians.

Andrius is advising Debitum on International Business Development, opening his great network of connections as well as valuable insights on global projects among various regions. We are grateful to have Andrius on board, as he brings a wider perspective of what is important for developing business globally.

This time we have touched the question of alternative financing from the global perspective, especially when small and medium enterprises (SMEs) are expanding abroad and need funds for it. You most probably remember our Fernando story on how Debitum model works that shows an example of an SME owner willing to export its production to other countries. In this video, Andrius is sharing the story about one of the former missions that he had s a financial Attache discovering barrier for the SME to receive financing from foreign banks.

This mission has revealed that incoming SMEs were perceived as too small to be in the target market of local banks and have a higher risk rating. However, we believe that small companies have a huge potential for growth and one of the main goals of all countries is to create great conditions for business growth and economic development.

Watch the interview to discover why companies need alternative financing and financing in general.

Transcription

Monika:
Hi, I am Monika from Debitum Network Team, and today my guest is business development advisor, Andrius Nikitin. Andrius, nice to see you here.

Andrius:
Nice to see you too.

Monika:
Andrius is a commercial attache at the embassy of the Republic of Lithuania in London, and he currently lives in London and is visiting Republic of Lithuania. So nice to see you here, can you say more about yourself?

Andrius:
Well yeah, basically I’m residing in the UK, but currently I’m on paternity leave, but as a commercial attache actually I’m serving three countries. So UK is probably the main one, Oman the second, and Portugal the third. And as a commercial attache, yes I have a duty to represent various businesses, so various Lithuanian businesses, especially SME sector, which has a will to export to certain countries, to my certain countries, and also my duty is to attract business to Lithuania.

So I’m working both sides, I do represent Lithuanian companies abroad, and also I’m dealing with foreign companies, which have plans to work in Lithuania, to invest in Lithuania, to build something, and as we see in Lithuania now, it’s the fastest growing economy and we’re receiving a lot of investments from foreign countries, from foreign companies. And I would say that Fintex is our strongest one at the moment. Of course, we do care about manufacturing service, and some more activities.

Monika:
So, Andrius, could you tell them all what you think about these new technologies, and blockchain and all other developments?

Andrius:
I’m really excited because I’m lending myself, I’m really following all the new technologies. I do like approach of Debitum Network by connecting so quickly so many people around the world. So that ecology, I think it’s a miracle for the SME sector because it’s going to provide great opportunity to attract new investors, to connect proper investors with the proper clients, and in Lithuania we always, on the technology side, we have a lot of new startups with the leading technologies. I can mention many of them, which working for the apps, with the IT projects we have in Lithuania many technology parks, the bank back offices, which provides IT services for the international banks. And Debitum Network actually want to be the part of the new technology, and this really excited me because I see what great opportunities could be achieved by connecting all the different cultures, peoples, investors, clients, etc.

Monika:
So, you are a Debitum Network advisor, and what are the key ares you advise in our project?

Andrius:
Well basically I have a financial background because I use to work in a Lithuanian central bank, but at the moment the key area I would say is my network, because I’m well connected with many financial institutions in Europe and abroad. So my knowledge actually is to bring the proper investors from my network would be probably useful with the Debitum Network to connect with the relevant partners, even relevant advisors, and I’m doing it already. So we have some British people considering and, some Arabic people as well to be involved in Debitum Network activities.

Monika:
Nice. And you had a huge experience, and I know several years ago you had even a special mission. Can you tell more about that?

Andrius:
Well, yeah, I had many missions, but especially I’d like to highlight that we have an agency INVEGA, which is a government guarantee agency, and when INVEGA became capable to provide collateral to Lithuanian companies and to enable Lithuanian companies to borrow from foreign banks, I had a special request from governments to approach international banks, and to approach international institutions to finance our SME sector. Everything was perfect, we had a million inquiries from foreign banks, but the one problem was that the projects folios from Lithuanian companies was too small for the foreign banks, and the profit yield for the international banks was too low. So the projects I would say was unsuccessful because there was no interest from foreign banks to lend or to borrow to certain Lithuanian companies. So that special mission I wouldn’t say failed, but it wasn’t a great success, but I’m still looking for the opportunities to find alternative financing for Lithuanian SMEs from foreign financial institutions.

Monika:
And let’s talk about alternative financing, why companies need alternative financing, and why in general companies need additional financing and investments.

Andrius:
Because in countries and at home it’s always easy because you have a background, you have an infrastructure, we’ll say. When you are going abroad it’s always tough, you have to maintain your running costs, you have to pay certain consultant people you have to invest manpower, you have to invest your time, even you have to invest in certain expenses like running or having an office, and producing your product, where you need really the relevant cashflow. So why the, I would say, relevant budget it is very important for those SMEs, and banks usually are not lending to companies where it’s very difficult to measure risk, because we never know whether your product will be recognized in a foreign country or wouldn’t. So it means you are always in a great risk position, so usually the banks are very cautious to lend the money for such projects. So why alternative financing is probably vital for those startups, just to be or to have enough power, or enough strength to expand in foreign countries.

Monika:
So, what do you like about Debitum Network project? What are the key confidences you value most?

Andrius:
I do like that the platform is very transparent. I really like the Debitum Network has recognized partners, and I see that transparent platform, and I know the people actually was in the management boards, and I will trust Debitum Network. Seeing all the picture, I do believe that Debitum Network will be able to finance SME sector. As I told, it’s my duty to promote the Lithuanian companies exports abroad, and I do see that those companies usually need some alternative finance. So this is a great opportunity for Debitum Network to fulfill that gap, which exists now in our market.

Monika:
Yes, and actually we’re aiming to connect companies all around the world with investments.

Andrius:
Yes.

Monika:
Not just Lithuanian companies, but in general small and medium sized companies.

Andrius:
It’s also fulfilling my duties to attract investments, so for me it’s easing my task. When I see international investors investing in Debitum and investing, so I do believe that all the investments were spread out among the Lithuanian startups, or even SMEs.

Monika:
Thank you Andrius.

Andrius:
Thank you.

Monika:
Thank you all for watching, and I invite you to visit our website, debitum.network, and join us for a discussion on our Telegram channel.

 

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