Erste Hungary, EIF seal deal to finance HUF 40 bln of SME loans

Initiatives

Erste Bank Hungary and the European Investment Fund (EIF), the EU agency for the provision of finance to small and medium-sized enterprises, have signed an agreement that will support HUF 40 billion in loans to local SMEs, the fund said on Monday, as reported by state news wire MTI.

Erste Bank Hungary will use the financing to launch a fast-track term loan and a five-year revolving or term loan facility for SMEs in the farm sector. Borrowers will not have to meet a high collateral requirement because of an EIF guarantee provided under the EUʼs COSME program for improving access to SME financing.   

The transaction is the fifth agreement in Hungary made possible by the support of the European Fund for Strategic Investments (EFSI), the central pillar of the European Commissionʼs Investment Plan for Europe, an ambitious infrastructure investment program first announced by European Commission President Jean-Claude Juncker in November 2014, and since known informally as the "Juncker Plan."

Around 1,000 Hungarian SMEs are expected to benefit from the loans over the next three years, according to the MTI report.

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