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Central bankʼs funding scheme said to lift GDP

MNB

The National Bank of Hungaryʼs (MNB) Funding for Growth Scheme (FGS) has added more than 1% to Hungaryʼs GDP since it was launched in the summer of 2013, the central bank said in a review of the program which makes cheap credit available to SMEs.

The FGS, together with the parallel construction FGS+, brought to a halt the 5-7% annual fall in SME lending stock, the MNB said, though conceding that a "lasting lending turnaround has not happened yet". It noted that the FGS is winding up at the end of this year and that the domestic banking sector would have to meet the challenge of bringing lending activity to appropriate levels in future.

The MNB estimates that corporate lending stock must rise an annual 6-9% to support lasting economic growth.

Some HUF 1,500 bln in financing from the FGS has gone to about 23,500 businesses since its launch.

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