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:
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).
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