BUDAPEST: Hungary’s central bank (MNB) has extended the deadline for companies and small and medium-sized firms on growth schemes to December 31, 2016. The deadline was extended to allow for the implementation of financing longer investment projects, the central bank said.
The bank also said it will allow lenders who use the cheap financing to add guarantee fees on top of a 2.5% lending margin limit. “While raising financing costs just a bit, this step will allow a number of micro and small businesses access to credit available under the programme,” the bank said. Under the schemes, the bank provides zero-interest refinancing to banks which they can lend to SMEs at an APR not exceeding 2.5%. Details of the changes, to come into force on May 1, will be announced later. Originally, most of the amounts allocated under the programmes were to have been available until the end of this year.
Meanwhile the central bank’s Monetary Council decided at a policy meeting to reduce the central bank’s base rate by 15 basis points to 1.8%, in line with market expectations. In a statement published after yesterday’s decision, the Council said the inflation outlook and the cyclical position of the economy “point in the direction of a reduction in the policy rate and loose monetary conditions for an extended period” if the assumptions underlying the MNB’s projections hold.
