The final part of the FGS will be divided into two pillars, each of them allocating 300 billion forints to lenders to finance cheap corporate loans. In the first pillar, the NBH will provide lenders with zero % financing which they can lend to businesses at an APR not exceeding 2.5%.

Loans will be capped at 1 billion forints and may be purposed for a narrower scope than in the second phase of the FGS.

The second pillar will focus on credit for companies with foreign currency revenues. The NBH will provide zero percent forint financing to lenders combined with an FX swap element. The APR on FX loans disbursed using the financing will also be capped at 2.5%.

Ever since the FGS was launched in the summer of 2013, more than 28,000 SMEs have had access to over a trillion forints in cheap credit, the NBH noted. Banks participating in the GSP will be required to undertake an explicit quantity of lending to SMEs.

In this manner, the programme will make it possible to draw a distinction between those banks that are active participants and those that are passive participants of the credit market, the NBH added. Márton Nagy, the central bank’s deputy governor, presenting the GSP on Tuesday, said that banks actively participating in the programme should have their banking tax lowered as against banks who fail to boost lending to the SME sector.

Banks would not have a set earmark for the amount they should be lending to small companies, as it is “not the size of the loans that counts as much as the targeted groups.”

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