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Eximbank, Mehib allocated Ft 1 bln from state to support farming

The Ministry of Agriculture and Rural Development has signed an agreement with the Hungarian Export-Import Bank Rt (Eximbank) and the Hungarian Export Insurance Bank Rt (Mehib) allocating Ft 1 billion to be used for subsidies on interest and fees for loans and insurance for farming exports, undersecretary at the ministry Fülöp Benedek announced on Wednesday. Eximbank will be allocated Ft 900 million of the subsidy and Mehib Ft 100 million. The subsidy will be used to cover half of the interest and fees for loans used to pre-finance production or sales of, or purchase supplies or pay for storage for farming exports in 2006 and 2007. Eximbank CEO Zoltán Bodnár said the subsidized loans are available for Ft 10 million-Ft 500 million, but may cover no more than 75% of the export contract value. Interests on the loans, which have a tenor of no longer than 18 months, will be capped at 2.8 percentage points over the six-month LIBOR or BUBOR. If clients produce a guarantee from a commercial bank, the interest rate will be 1%-1.2%.