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OTP disburses first loans for families expecting babies

OTP Bank says it has disbursed its first “baby-expecting support” (babaváró támogatás) in Veszprém and Zala counties. In both cases, the full HUF 10 million was taken out by the approximately 30-year-old couples, according to the lender.

The support program, which was launched on July 1 by the Hungarian government, aims to help young couples in the early stages of building a family, by providing financial support.

The maximum loan is HUF 10 mln, which is interest-free if a baby is born within five years of taking out the loan. The program is part of a bigger initiative by the state to promote family-building in Hungary, addressing the countryʼs chronic population decline. Couples can fill out a form to see whether or not they are eligible and calculate their monthly repayments on the OTP website.

To be eligible, couples must have had their TB (social insurance) certificates for more than three years, and also have to be married.

Billions in outlays expected

State news wire MTI reports that some of Hungaryʼs biggest banks expect outlays of state-subsidized prenatal baby support to reach tens of billions of forints annually.

K&H Bank told MTI that outlays of the credit construction are likely to come to HUF 10-20 billion yearly. It estimated eligible borrowers would take out HUF 8 mln of the credit on average, adding that it expects one-third of those clients to use the loans to refinance existing home or personal loans.

Takarék Group told MTI that its members expect to lend around HUF 60 bln of the prenatal baby support to clients by the end of 2022.