On April 20, the Hungarian National Bank published the product information brochure for the Funding for Growth „Go!” scheme, one of the most significant items of the Central Bank's economic support measures introduced due to the coronavirus. The National Bank offers refinancing loans with a maturity of up to 20 years at 0% interest rate to credit institutions holding accounts with KELER, and being a member of VIBER or ICS (BKR). The deadline of sending a duly signed framework agreement to the MNB is May 9. The predecessor of the program was launched in 2013, and since then it has provided funds to more than fifty thousand enterprises with favourable and predictable interest rates.

The most important change for banks of the conditions announced earlier, was limiting the time available for credit assessment to ten working days. Credit institutions that do not make a credit decision on loans / financial leases below HUF 300 million by the 10th working day following the receipt of the required documentation will not be eligible for refinancing provided by the National Bank regarding the given loan claim / financial lease. The change requires significant preparation from banks both in terms of risk management, front-office and back-office processes. The National Bank recommended that SMEs considering loan applications contact multiple credit institutions at once, thus ensuring that they have access to new sources on the most favourable terms. A number of additional details about the scheme were outlined:

• Only investment loans, working capital financing loans and credit redemptions with a maximum interest rate of 2.5%, can be granted under the program.
• Investment in accordance with accounting laws means the acquisition of intangible assets or tangible assets, the modernization of existing or leased assets and the acquisition of holdings in companies established before 1 January 2020.
• The program also provides opportunities for larger SMEs to finance longer-term as the maximum loan amount is HUF 20 billion, and the National Bank has extended the highest duration to 20 years.
• As one of the objectives of the Funding for Growth “Go!” scheme is to support the retention of jobs and production capacities, working capital loans were reintroduced to the scheme, with a maximum maturity of 3 years and virtually no restriction in use.
• In the earlier stages of the FGS, micro-enterprises represented the largest proportion of borrowers, therefore the National Bank has set the minimum loan amount at HUF 1 million.
• Under the program, it will be possible to pre-finance EU grants that an SME has already received or a normative grant to which it is entitled but the amount has not yet been paid.
• In order to reduce the debt service, it will be possible to replace loans not previously taken under FGS, the purpose of which is in line with the purpose authorized above in the FGS “Go!”.
• Market participants will receive funds in the order of submitting the relevant report up to the first HUF 1,200 billion, the remaining HUF 300 billion will be allocated by the National Bank, which will provide information on the allocation after the first HUF 1,200 billion were utilized.
• The National Bank has the right to request ad hoc data on loans implemented within the framework of the FGS scheme, and it also has the right to carry out inspections randomly.

The National Bank intends the Funding for Growth “Go!” scheme, which has been fine-tuned to the changed financing needs of companies, to help many enterprises survive the crisis due to the longer term of the scheme and its usability for working capital financing. Implementing these solutions can be a significant task for banks (especially credit assessment in less than 10 working days), but as a result, banks' lending activity and earnings can improve, and they can expect new customers with relatively low risk and cross-selling opportunities generated by the program (e.g. current account management, foreign exchange transactions).