Sberbank Hungary boosts SME market share

Sberbank Hungary arranges €126.9 million in loans under the Funding for Growth Scheme

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Mag. Linda Michalech
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Sberbank Europe AG
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Sberbank Hungary arranges €126.9 million in loans under the Funding for Growth Scheme

Péter Szabó, Head of SME Division at Sberbank Hungary

Péter Szabó, Head of SME Division at Sberbank Hungary

In 2013, the Hungarian National Bank (MNB) launched an unorthodox large-scale program to boost the local economy. Under the so-called Funding for Growth Scheme, MNB provided commercial banks with zero-interest refinancing for up to 10 years, which they could then lend to small and
medium-sized enterprises at an annual percentage rate not exceeding 2.5%. The program was a success, generating 0.6% of annual GDP growth on average. Following its launch in 2013 it was extended three times before ending in Q1 2017.

 

Hungarian business received €8.7 billion in new loans under the scheme, which significantly increased the country’s investment rate. Two-thirds of the loans were granted to micro enterprises, the rest to SMEs. Sberbank Hungary attained 3.7% of the market share with €126.9 million in loans (90% of which to SMEs), while other banks recorded an average of 2.5%.

Péter Szabó, Head of the SME Division at Sberbank Hungary: “The attractive pre-defined terms of the loans under the Funding for Growth Scheme made the loan disbursement easy to calculate and repayment easy to plan, which was a win-win situation for both our clients and us. Ultimately the program allowed us to support our customers in realizing their business development investments and thus enhance their competitiveness.”

Business interest in the National Loan Program fluctuated between 2013 and March 2017. The last months of each phase of the program were the most productive, generating 60-70% of economic output. Overall, Sberbank Hungary increased its market share in the micro and SME segment, disbursing €129.9 million in loans over the whole program with a total income portfolio exceeding €12 million. The bank managed to exploit over 98% of the available funds allocated to it by MNB during each of three phases, allowing its clients to take advantage of the 2.5% fixed interest rates, low additional costs and fast, flexible processing of their applications.

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