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EBRD, EU and Volksbank Hungary extend cooperation
€5 million loan for the support of small businesses
The European Bank for Reconstruction and Development is extending a new HUF1.3 billion (€5 million) loan to Volksbank Hungary. The funds will support the financing of small and medium-sized enterprises in Hungary, especially in the country’s less developed regions. The EBRD and Volksbank Hungary signed a first loan agreement worth €10 million in December 2001 – all of which has since been employed to make 363 loans to SMEs.
Both loans are complemented with €2.5 million from the European Union for staff training and other costs. These amounts are part of the EU/EBRD SME Finance Facility, a programme of the European Commission alongside the EBRD to promote SME growth and development across the 10 countries expected to join the EU.
Hubert Warsmann, EBRD Director for Hungary, said that the loan will help SMEs in Hungary to fund modernisation and expansion projects to successfully compete in increasingly open and challenging markets, in line with EBRD’s strategy to reach the local corporate sector in Hungary.
The EBRD and Volksbank Hungary have been partners since 2001. Volksbank Hungary, a universal bank serving both international and domestic customers, has assets of about $460 million.
The EBRD has made cumulative commitments of about €1.4 billion to 60 projects in Hungary and helped mobilise a further €4 billion from business partners.
The SME Facility was launched in 1999 under the Phare Programme – the main channel for the EU's financial and technical cooperation with accession countries – to support SMEs by providing access to loans, leasing and equity finance from local financial intermediaries. Phare’s overall budget is about €1.5 billion a year. (For further information see: http://europa.eu.int/comm/enlargement/)
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