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Hungary to extend repayment moratorium, for some

A blanket moratorium on loan repayments for borrowers will be extended for six months from the start of 2021, but only for families with children, pensioners, the jobless and fostered workers, as well as for businesses whose turnover has dropped more than 25%, Prime Minister Viktor Orbán said last weekend, according to a report by state news wire MTI.

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The moratorium was introduced earlier this year to ease the negative economic effects of the coronavirus pandemic.

The opt-in for the moratorium will be automatic for families with children, pensioners, out-of-work Hungarians, and fostered workers, but businesses whose revenue has dropped more than 25% will need to contact their banks to avail of the extension, Orbán said.

He added that the government will also prohibit banks from canceling any retail or corporate pre-crisis loan contracts for six months, effectively putting the onus on lenders to restructure the credit of distressed borrowers who are not covered by the extended moratorium.

The PM noted that 1.6 million households and 60,000 businesses are availing of the moratorium, which was originally set to expire at year-end, leaving them with some HUF 2 trillion.

Orbán made the announcement after a meeting of the Economic Defence Operative Corps, established to coordinate Hungaryʼs economic response to the coronavirus crisis.