Hungary amends SME loan programme, making HUF 1,500 billion more loans available for businesses

The Széchenyi Card Programme has been helping to meet the financing needs of Hungarian micro, small and medium-sized enterprises for more than two decades, and it is still very favourable, providing funding for domestic SMEs at a fixed interest rate of 5% until the end of the term.

The central bank (MNB) finally lowering the base rate below 10% has prompted entrepreneurs to express their need to SME lender KAVOSZ, which has recently proposed the government to reduce the fixed 5% lending rate to 3.5% as soon as possible in the Széchenyi Card Programme.

The government has been open to our idea, and calculations and discussions have already begun.

KAVOSZ President László Krisán told Portfolio in an interview exactly a month ago. He reminded that Hungarian SMEs provide two thirds of employment, 55% of GDP and 30% of the country's exports.

The government has just decided to increase the upper limit of the maximum amount of commitments that can be made for the granting of subsidies under the Széchenyi Card Programme by an additional HUF 300 billion, to a total of HUF 1 700 billion. Under the Széchenyi Card Max Plus Programme, launched in early 2023,

nearly 65,000 loan applications were received by 31 March 2024, worth some HUF 2,600 billion, of which HUF 1,600 billion is in the form of contracted loans.

The increase concerns the following well-known schemes: 1. Széchenyi Card Overdraft Facility and within it Széchenyi Tourism Loan 2. Széchenyi Liquidity Loan 3. Széchenyi Investment Loan and its part Agricultural Széchenyi Investment Loan 4. Széchenyi Leasing 5. Széchenyi Microloan 6. Széchenyi Card Classic (new applications not accepted).

The HUF 300 billion increase in the commitment ceiling of the Széchenyi Card Programme will allow for more than HUF 1,500 billion of additional lending, providing SMEs with significant new sources of finance.

According to the Economy Ministry, the resulting developments will make a significant contribution to restarting economic growth this year by boosting investment and lending activity, and to shifting the economy into a higher gear and achieving a growth rate of 4-5% in the longer term.

Cover photo: In this photo released by the Press Office of the Prime Minister, Prime Minister Viktor Orbán speaks at a ceremony marking the 20th anniversary of the Széchenyi Card Programme on 29 November 2022. MTI/Prime Minister's Press Office/Zoltán Fischer