MNB has HUF 750 billion ($3.3 billion) at max 2.5% interest rates available to SMEs for refinancing loans and forex-based loan conversion, but estimates say that as little as HUF 150 billion will ultimately be used on investments. In Wolf’s assessment, “OTP Bank had to sign contracts with clients for the credit by the end of August, leaving little time for businesses to make preparations for any investments and apply for loans.”
Wolf stated that the “Funding For Growth” scheme simply wasn’t enough to reverse what he called “a years-long decline in corporate lending.” While admitting the “Funding for Growth” loans “probably offered some help” to the banking sector, a Reuters report quoted the OTP deputy CEO as saying that “Economic growth moves in tandem with net loan flows and no country in western Europe has managed to produce significant [economic] growth without an increase in net lending. In Hungary, the corporate loan stock has been shrinking for the past five years, and I think not even the [“Funding For Growth” scheme] will be able to reverse that this year.”
According to the latest MNB figures, loans to Hungarian businesses fell 6.4% year-on-year in the second quarter of 2013.
Also speaking at the conference was Intesa Sanpaolo Group Supervisory Board Chairman György Surányi, who assessed the sitting government’s “unorthodox” economic policies, including the “Funding For Growth” scheme have not brought “meaningful economic growth and increased investment” to Hungarian businesses. “The low investment rate temporarily stimulated the central bank,” Surányi said, “but a significant proportion of the ‘Funding for Growth’ scheme has elicited no new investment.”
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