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A boost from EBRD and EU to Hungary’s leasing market
€20 million loan to Budapest Leasing to support small enterprises
Private entrepreneurs in Hungary are to benefit from a €20 million loan by the
European Bank for Reconstruction and Development to Budapest Leasing. The
credit line - along with a substantial package of incentives worth €3 million
being made available by the European Union - will be used to finance leases of
up to €125,000 each for micro- and small-sized companies.
The Hungarian leasing market has been growing steadily since 1999, with
average annual growth around 30 per cent and about €2 billion of new assets
leased in 2002, excluding real estate. The market is characterised by the
dominance of the vehicle finance segment: passenger cars account for 75 per
cent, and trucks 13 per cent, of total lease finance. Equipment leasing,
however, is seen as increasingly important, and Budapest Leasing aims to
strengthen its position in this segment.
Budapest Leasing, owned by Budapest Bank, is a leading equipment lease
provider in Hungary, and a specialist in truck leasing. It sees the local
small and medium sized enterprise (SME) sector as rich with potential. The
truck market is particularly strong and is expected to remain so after EU
accession, when regulatory changes will require the replacement of many trucks
to meet EU standards.
Jonathan Woollett, EBRD Director for Non-Bank Financial Institutions,
underlined the importance of affordable finance for the development of small
and medium-sized enterprises. The growth of this segment is crucial to the
structural transformation of the economy, he said. The agreement with Budapest
Leasing will facilitate SME's access to funding.
Balázs Báti, Head of Budapest Leasing, added that his company’s mission is to
be the preferred lease financing partner to Hungarian SMEs purchasing
equipment and/or trucks. The loan from EBRD and the contribution from EU will
further help Budapest Leasing to reach this goal and to provide an optimal
financial service to the Hungarian SME segment, he added.
Budapest Bank group, owned by General Electric is a key player in financing
Hungarian SME businesses. Budapest Leasing Ltd. (Budapest Lizing RT) was
established in 1992. The company has achieved substantial growth since then.
In 2003 the new volume in truck and equipment financing reached €90 million
and the company’s pre-tax income was almost €4 million. (Visit Budapest Bank’s
website: www.budapestbank.hu)
The EU/EBRD SME Finance Facility is a programme of the European Commission and
the EBRD which promotes growth and development of SMEs across the 10 countries
expected to join the EU in May. The 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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