Gov't Extends Lending Rate Freeze to Small Businesses


Hungary's government has decided to extend a freeze on lending rates to SMEs, Gergely Gulyás, the head of the Prime Minister's Office, said at a weekly press briefing on Saturday, according to a report by state news wire MTI.

Detailing the measure, Economic Development Minister Marton Nagy said rates on SME credit will be rolled back to levels on June 28, when the three-month Bubor was at 7.77%, from November 15 through the first half of 2023. He noted that the three-month Bubor now stands at 16.69%.

The measure will impact close to 60,000 SMEs with almost HUF 2 trillion of credit, he added, pointing out that 40-45% of SME lending stock is credit with variable rates.

Nagy said banks would cover the cost of the rate freeze, which he put at around HUF 80 billion for a half-year period. He noted that the Hungarian Banking Association had been informed of the measure.

In addition to the lending rate freeze, Gulyás said the government had also decided at the cabinet meeting on Wednesday to extend the Szechenyi Card subsidized credit scheme for businesses and to launch a "factory rescue" program.

Nagy said the rate businesses pay on the Széchenyi Card credit will rise from 3.5% to 5% from January 1, 2023.

He said the government will use the bank levy as an incentive to lend, explaining that "banks that lend will pay less and banks that don't will pay more".

The launch of the factory rescue program, on November 2, was announced earlier Saturday by Minister of Foreign Affairs and Trade Péter Szijjártó. The government has earmarked an initial HUF 150 billion for the scheme which will support energy efficiency improving investments at big companies, he said. Companies in the capital may apply for funding to cover up to 30% of investments, while the threshold will be 45% for companies in the rest of the country, he added.

The minimum investment size is HUF 200 million. The funding is capped at HUF 6 bln per investment.


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