MNB: Unused funds from FGS+ to be reallocated to FGS scheme

MNB

All unused funds from the Funding for Growth Scheme+ (FGS+) program to finance small and medium-size enterprises (SMEs) will be reallocated to the original FGS scheme, the National Bank of Hungary (MNB) said today.

FGS+ was launched with HUF 500 bln in March but feedback from banks now suggests they will not be able to disburse the whole amount to SMEs in time, MNB said.

In response to this, the Monetary Council decided on Tuesday to allow banks to use unspent FGS+ funds as part of the FGS program as demand for this type of funding is picking up due to economic growth, seasonal effects and the eventual phasing out of the program.

At the end of October the MNB will re-examine the issue and reallocate unused funds from banks to more active lenders to ensure maximum utilization.

SMEs will be able to sign contracts for lending from the FGS and the FGS+ schemes until the end of the year. In 2016 MNB will start to wrap the program and take measures to place SME lending back on a market basis.

MNB will provide further information on completion of the FGS programs in November.

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