Interest-Free Fast Loans amounting HUF 16 billion have been claimed from member banks of Hungarian Bankholding
Apr 13, 2021.
Demands are expected to increase further in parallel with the alleviation of restrictions. Over 1,800 companies have already signed for the Interest-Free Fast Loan with a total value of more than HUF 16 billion at the member banks of Hungarian Bankholding. The MFB Points of Budapest Bank, MKB Bank and Takarékbank continue to show increased demand for the loan, which can be requested by companies in distress to reopen their operations. With the alleviation of restrictions issued against the pandemic, demands are expected to increase further at Hungary's second largest banking group.
Since its 8 March launch, more than 4.000 companies have enquired about the Interest-Free Fast Loan at the member banks of Hungarian Bankholding. About two-thirds of the applications were submitted at Budapest Bank, MKB Bank and Takarékbank: out of the HUF 25 billion claimed at the MFB Points so far, HUF 16 billion is provided by the member banks of Hungarian Bankholding to more than 1,800 companies. Nine out of ten companies are entitled to the interest-free loan, with enterprises claiming average loans of HUF 8.8 million. Most applications were submitted in Budapest and in Pest, Zala and Somogy counties, with the least amount of requests applied in the northern Hungarian region.
According to the expectations of Hungarian Bankholding, thousands of companies will apply for fast loans amounting to tens of billions of HUF at the MFB Points of the three banks, located at 474 locations nationwide.
“We expect that the number of claims will increase with the alleviation of restrictions – we already see the first signs. According to the forecast of Hungarian Bankholding, the current HUF 100 billion budget of the program may be exhausted by the summer”
According to the Hungarian Development Bank (MFB), based on received entrepreneurial feedbacks, starting today, companies established in 2019 can also apply for the Interest-Free Fast Loan if they achieved a positive operating result in the year of establishment. Another important modification is that a change of ownership of 50% or more in the period prior to March 8, 2021 is no longer an exclusionary reason for borrowing, such transactions are not permitted for borrowing after this date.
The interest-free loan of HUF 1-10 million provides funds for the reopening of micro, small and medium sized enterprises, entrepreneurs and small taxpayer enterprises, and from now on, non-profit limited liability companies in sectors affected by the economic impact of the coronavirus epidemic. More than fifty activities are eligible for the loan, from hospitality and accommodation services, merchants selling non-essential items to the performing and entertainment industries. A loan claim can only be submitted after the main activity of the company, with the loan amount not exceeding the 2019 sales revenue of the company.
The fast loan can be used to cover wage, contribution, rent and operating costs, as well as to finance the stocks needed for reopening. Companies may apply for the loan with a maximum term of ten years and a repayment grace period of three years, by paying a 100% advance after the conclusion of the loan agreement. Costs must be accounted for within one and a half years after payment.
The state-owned Hungarian Development Bank (MFB) has established the network of MFB Points to mediate repayable grants available from the European Union in the 2014-2020 financing cycle. Of the 642 MFB Points, 474 are operated by the member banks of Hungarian Bankholding Ltd.
Loan products combined with credit and non-repayable funds available at MFB Points cover five thematic areas: strengthening research, technological development and innovation; enhancing the competitiveness of micro, small and medium-sized enterprises; promoting employment and worker mobility; facilitating access to infocommunication technology and increasing the use and quality of e-technologies; and the transition to a low-carbon economy in all sectors.
Hungarian Bankholding Ltd.
Hungarian Bankholding Ltd. commenced its effective operation on 15 December, after MNB (acting as the central bank of Hungary) approved the merger of Budapest Bank Group, MKB Bank Plc. and Takarék Group, and the shares of the key owners were transferred to the joint holding company. By transferring the in-kind contributions, the second largest banking group in Hungary has been established, with the Hungarian State owning 30.35 percent of the shares through Corvinus International Investment Ltd., the previous direct owners of MKB acquiring 31.96 percent of the shares and the previous direct owners of MTB acquiring 37.69 percent of the shares. The new banking group serves 2.2 million retail customers and 375 thousand corporate customers. It is the market leader in many fields. Its aggregated balance sheet is HUF 8,424, it has a HUF 3,787 credit volume and a HUF 5,414 billion deposit volume.
The Takarék Group is one of the biggest banking groups of Hungary and is a key member of the Hungarian financial system. The members of the Group are MTB Bank of Hungarian Savings Cooperatives Ltd. as its integration business management organization, Takarékbank Ltd. as its universal commercial bank, and Takarék Mortgage Bank Plc., as its specialized credit institution. Its members also include other companies and subsidiaries specialised in factoring, leasing, fund management, real estate management, IT, as well as other auxiliary financial services. The prudent and proper operation of the Takarék Group is supervised by the Central Organization of Integrated Credit Institutions having special licenses in this regard. Takarékbank Ltd. is the universal commercial bank of the Takarék Group, it is also the legal successor of the savings co-operatives. It has nation-wide coverage and is one of the biggest domestic financial institution, operating the biggest branch network in the country; it serves 1.1 million clients.
The 70 years old MKB Bank Plc. is the Hungarian financial system’s classic bank. As a result of a successful reorganization between 2015 and 2019, the operation and system of this financial institution follows the criteria and expectations set by the EU. As a significant universal bank of Hungary, MKB provides long-lasting value to its customers through its predictable partnerships. The bank is set on a dynamic development path; it has a well-developed digital foundation and strategy. It also has a traditionally strong corporate and private banking clientele, as well as strong consulting and analytical skills. The core value of the financial institution is its professional customer service enhanced by well-prepared, supportive, honest, and professional work.
Budapest Bank Ltd. was established as one of the first domestic commercial banks in 1987; it is now one of the ten largest domestic banks in Hungary. In addition to retail services, the universal bank has been a committed partner of Hungarian small and medium sized enterprises for decades, and its market position is particularly strong in the segment. Together with its subsidiaries, Budapest Fund Management Ltd., Budapest Leasing Ltd. and Budapest Asset Financing Ltd., the bank employs a total of nearly 3,000 people, with its nationwide network including nearly 100 branches. In 2006, it was the first in the Hungarian banking market to open its operational center in the countryside, Békéscsaba, creating 800 workplaces in the region. Responsible thinking applies at all levels of the bank's activities and its corporate social responsibility strategy, with an emphasis on financial literacy, commitment to community values, volunteering, equal opportunities and environmental protection.
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