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Széchenyi card pilot study could show rates are reason for sluggish corporate lending

The head of the company that runs Hungary's Széchenyi card programme, a state sponsored scheme that offers businesses revolving credit, wants to find out whether the high cost of borrowing or low demand is behind torpid corporate lending. László Krisán, CEO of KAVOSZ, said in Tuesday's Napi Gazdaság that introducing a full interest subsidy for cardholders could serve as a pilot study showing high interest rates are the reason businesses are not borrowing. If businesses still do not avail of credit on which they must pay only transfer and risk costs, this could show intervention is necessary in other areas, he added. Hungary's government has argued high interest rates are to blame for sluggish corporate lending. But others - notably, the former head of Hungary's central bank - have said credit supply is creating the bottleneck.