MNB plans another HUF 600 bln for SME loan program

MNB

The National Bank of Hungary is expected to enter the final phase of its Funding for Growth Scheme (FGS) next year with two allocations of HUF 300 bln apiece, daily Magyar Idők said today.

The MNB launched the scheme which provides lenders with 0% financing for credit for businesses in the summer of 2013. So far, allocations under FGS programs add up to about HUF 1,715 bln. FGS credit has gone to about 26,000 businesses, according to reports.

The MNB earlier said it would wind up the FGS programs next year and take measures to return SME lending to a market base. Central bank officials are scheduled to hold a press conference on changes to the scheme later today.

Magyar Idők said the FGS would be restructured next year and feature a FX element – available only to companies who have foreign currency revenue – in addition to a forint one. The FX element will combine forint financing with FX swaps, the paper added.

Contracts under the restructured scheme may be signed until the end of 2016, according to the plan, Magyar Idők said.

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