The European Bank for Reconstruction and Development (EBRD) is providing a senior loan of €100mn to Erste Bank Hungary, the second largest retail bank in Hungary, for on-lending to small and medium enterprises (SMEs).
The EBRD credit line to Erste Bank Hungary will be used to provide sub-loans of up to €1.5mn to Hungarian private independent small and medium-sized companies, with a maximum number of 249 employees and a maximum turnover of €50mn.
“In the current challenging environment, the EBRD is increasing its cooperation with the banking sectors in countries of its operations. With this loan we are hoping to stimulate confidence in the Hungarian economy and the further development of SMEs with much needed lending to the sector,” says Peter Reiniger, EBRD’s business group director for Central Europe and the Western Balkans.
“The agreement with the EBRD will enable us to make a broader approach in financing the Hungarian SMEs, which is particularly important in these harsh times. Our aim is to help our existing and prospective SME customers surpass the current turbulent environment and continue their activity. We regard the funds provided by the EBRD as an additional opportunity to achieve this,” says Edit Papp, chairperson and CEO of Erste Bank Hungary.
The EBRD financing offered to Erste Bank Hungary is a part of the bank’s joint initiative with the World Bank and the European Investment Bank to provide €24.5bn in support of the banking sectors in the region and the real economies hit by the financial crisis.
So far, the EBRD has committed more than €1.77bn in new funds for the financial institutions sector in countries of its operations this year.
Since the beginning of its operation in Hungary, the EBRD has invested over €2.6bn across more than 100 projects in the infrastructure, corporate, energy and financial sectors.
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