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New EBRD boost for Hungarian rural leasing
€5 million for Hungarian leasing company under EU/EBRD SME Finance Facility
The EBRD is extending a €5 million loan to Budapest Lizing (“BL”) which will
be used to finance leases up to €125,000 to farmers and small enterprises in
rural areas of Hungary. The funding is provided under the rural sub-window of
EU/EBRD SME Finance Facility, which will be complemented by a grant of up to
€500,000 from the European Commission for performance-based financial
incentives.
BL, fully owned by Budapest Bank, has successfully participated in the EU/EBRD
SME Finance Facility since 2003, with over 2,700 leases extended to SMEs, of
which almost 2,000 are micro-leases (less than €30,000). Through its regional
presence, BL is well positioned to expand into the rural segment of the
leasing market.
Balázs Báti, Managing Director of BL, said that this rural facility will help
the company approach even smaller enterprises than it did before and reach out
to more rural businesses. Mr. Báti also stressed that by taking this credit
line BL becomes the largest borrower under the EU/EBRD SME Finance Facility in
Hungary, which enables them to extend sub-loans to SMEs to the value of €30
million.
François Lecavalier, EBRD Director for Hungary, Czech Republic, Slovak
Republic and Slovenia, said this loan will help BL penetrate deeper into the
rural areas, which are traditionally less developed, and to reach out to
farmers and rural enterprises which for years have not been eligible for lease
financing. The transaction is expected to lead to increased competition in the
Hungarian rural finance sector as other financial intermediaries recognise the
potential of this underserved market.
The EU/EBRD SME Finance Facility, a joint programme of the European Commission
and the EBRD, supports the development and growth of entrepreneurs by
facilitating their access to finance. Under this regional project covering 11
countries, the Bank will make available funding of €1.35 billion, of which
€1,071.5 million has been committed in signed projects to date.
The EC has contributed €157 million in grant financing and technical
assistance since the launch of the EU/EBRD SME Finance Facility in 1999. The
Phare programme is the main channel for the EU’s financial and technical
cooperation with accession countries. For further information, see:
http://europa.eu.int/comm/enlargement.
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