Hungary central bank raises refinancing available in "Funding for Growth Scheme"

The National Bank of Hungary is expanding its "Funding for Growth Scheme" by 50%, central bank governor György Matolcsy said on Wednesday. The MNB will raise the amount of refinancing available for new SME loans from HUF 250 billion to HUF 425 billion. It will raise the amount of refinancing for the conversion of foreign currency-denominated SME loans from HUF 250 billion to HUF 325 billion. Of 40 partner institutions, 36 are getting refinancing for new SME lending and 27 are getting refinancing for FX loan conversions. About 90% of banks could place the entire amount of refinancing for new SME loans while 96% could place all of the refinancing for FX loan conversions. Oversubscription for refinancing for new SME lending was three-fold and oversubscription for refinancing for FX loan conversions was double. More than 100 savings cooperatives are participating in the scheme through their bank, Takarékbank, Econews learnt. Deputy-governor Ádám Balog said the MNB estimates the Funding for Growth Scheme could contribute 0.2-0.5% to GDP by the end of 2014. However, in a best-case scenario, the scheme could add 1-1.8%, he added. MNB executive director Márton Nagy said raising the amount of refinancing for new SME loans could generate HUF 150 billion-250 billion for new investments. The increased refinancing available under the Funding for Growth Scheme is equivalent to 21% of total SME lending stock in Hungary.