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The European Investment Fund (EIF) and Erste Bank Hungary, have signed a guarantee agreement to support €67 million of loans and leases to innovative Hungarian companies. The agreement was signed under the European Commission’s InnovFin initiative, backed by the EU’s research and innovation programme Horizon 2020.
The agreement was made possible by the support of the European Fund for Strategic Investments (EFSI). The EFSI is the central pillar of the European Commission’s Investment Plan for Europe, the so-called “Juncker Plan”.
Erste Bank Hungary will be incentivized to provide loans and leases to innovative SMEs and small mid-caps on more favourable terms. Today’s EUR 67 million transaction is expected to benefit around 350 businesses.
Speaking at the signature event in Budapest, EIF Chief Executive, Pier Luigi Gilibert, commented: “We are delighted to be signing this InnovFin SME guarantee agreement in Hungary. Erste Bank Hungary is among the top ten largest banks in Hungary with a strong focus on SME and small-midcap lending and this new signature will help the bank to expand its activities in the field of innovation financing for SMEs and small mid-caps at more attractive terms and conditions, targeting SMEs and small mid-caps.”
Commissioner for Education, Youth, Culture and Sport, Tibor Navracsics, said: “Small and medium-sized businesses are the backbone of the Hungarian economy. They need better access to affordable and long-term finance in order to continue to grow, to export to other European markets and create new jobs across the country. The agreement signed today is an important step, but many more businesses in Hungary could benefit from similar advantages. I, therefore, encourage them to apply in order to receive support from the Investment Plan for Europe.”
Commenting on the operation, Radovan Jelasity, Erste Bank Hungary’s CEO said: “Erste has always been at the forefront in broadening Hungary’s international financial relations and creating safe funding background. We are very pleased to welcome a new portfolio guarantee facility in our corporate world. In line with our business commitments, we continuously give important direction to financing innovative SMEs and small mid-caps. We would like to be everyone’s bank, we believe in our clients and we build strong relationships with them.”
Tamás Győr, Erste Bank Hungary’s Corporate Business Development Manager added: “After the tremendous growth of the SME loan market we expect above-the-market boost in our loan portfolio also this year. The loan demand mainly stems from investment activities in form of investment loans and connected working capital financing facilities. With such a guarantee facility we shall be able to support our SME and small-mid cap Partners in their growth with a wider range of beneficial opportunities”.
About InnovFin
The InnovFin SME Guarantee Facility is established under the “EU InnovFin Finance for Innovators” initiative developed under Horizon 2020, the EU Framework Programme for research and Innovation. It provides guarantees and counter-guarantees on debt financing of between EUR 25,000 and EUR 7.5 million in order to improve access to loan finance for innovative small and medium-sized enterprises and small mid-caps (up to 499 employees). The facility is managed by EIF and is rolled out through financial intermediaries – banks and other financial institutions – in EU Member States and Associated Countries. Under this facility, financial intermediaries are guaranteed by the EU and EIF against a proportion of their losses incurred on the debt financing covered under the facility.
Original source: EC
Published on 22 February 2018