SME owe about €3.3 billion on FX loans

Hungarian SMEs owed domestic lenders about HUF 1,014 billion (€3.3 billion) on foreign currency denominated loans at the end of 2012, preliminary data from financial market watchdog PSZÁF show. Prime Minister Viktor Orbán said at a business forum organised by the Hungarian Chamber of Commerce and Industry (MKIK) on Tuesday that the government plans to launch a programme in the first half of 2013 allowing SMEs to convert their FX loans into forints. The PSZÁF data show that FX loans made up a little more than 30% of SMEs' total outstanding loans from domestic banks at the end of 2012. About 70% of SMEs' outstanding FX loans were short term. Of SMEs' total short-term loans, about one-third were FX. A little more than half of SME loans with maturities over one year were denominated in foreign currency. SME lending accounts for a little more than one-fifth of banks' lending portfolio and 10% of their FX loan portfolio. The data cover only loans granted by domestic banks operating as joint stock companies and do not include lending by savings cooperatives, state-owned financial institutions such as the Hungarian Eximbank or Hungarian Development Bank (MFB) or Hungarian branches of foreign banks.