MNB stimulus could be disbursed later than summer

Contracts between banks and SMEs on loans backed by interest-free credit in the central bank's “Funding for Growth Scheme” will have to be signed between the beginning of June and the end of August, but the actual disbursement could happen later, National Bank of Hungary (MNB) Deputy Governor Ádám Balog said at a conference on Wednesday. This will allow time for the borrowers to acquire the necessary documents for investments, he said.
    Balog noted that the bank is considering the possibility including leasing contracts into the MNB's growth-stimulus program, though not during the present three-month period. The MNB deputy governor said that banks can apply for interest-free credit funding from the MNB for a minimum of 5% and maximum of 100% of their SME credit stock. The MNB specified only about the minimum 5% limit on bids when announcing that the Monetary Policy Council finalized the scheme on April 30.
    It has been discussing details with banks' representatives between May 6-8. Banks may grant HUF 3 million-HUF 3 billion SME loans for investments, working capital or topping up or pre-paying European Union grant money under the scheme, the MNB said at the end of April. The initial maturity of the MNB refinancing, and, consequently, banks' loans can be at most ten years. The actual term will match the terms of the loans to SMEs.
    The MNB will make HUF 500 billion of 0% financing available to banks in equal part for SME lending and for the conversion of foreign currency-denominated SME loans into forint ones in a three-month period under the scheme. Lenders' interest margin – including all fees and commissions and any possible guarantee charge – is capped at 2.5% on loans financed with the MNB credit. Banks will have to bid separately for refinancing available for lending and for loan conversion, and the 5% minimum bid will also apply separately to the two facilities, the MNB press department told Econews earlier.