MNB rolls out new incentive for SME lending
MNB headquarters in Budapest (Image by Jessica Fejos)
The National Bank of Hungary (MNB) said it will ease capital reserve requirements for banks who keep their promises to lend to SMEs, Hungarian news agency MTI reported
Lenders whose SME outlays reach 50-100% of commitments made under the MNBĘĽs Market-Based Lending Scheme (MLS) will be allowed a 20%-75% reduction in their capital reserve requirement for the credit. Lenders who reach or exceed their commitments could be allowed to reduce the capital reserve requirement on the credit by up to 100%.
The scale of any reduction of the capital reserve requirement may only reach lendersĘĽ capital conservation buffer.
“Capital thus freed up could support a further pick-up of market-based lending, and offer players on the domestic lending market a better return on equity,” the MNB said.
The measure is part of a package of incentives that will support a return to market-based lending announced by the MNB late last year, at the same time the central bank detailed the closing phase of its Funding for Growth Scheme.
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