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New EBRD boost for Hungarian rural leasing market
€5 million loan to SG Equipment Finance Hungary under EU/EBRD SME Facility
The EBRD is extending a loan of €5 million to SG Equipment Finance Hungary
(“SGEFH”). The funding for the Hungarian leasing company, which comes under
the rural sub-window of EU/EBRD SME Finance Facility, will be used to finance
leases to farms and small enterprises in the amounts of up to €250,000 in
rural areas of Hungary. The loan will be complemented by up to €500,000 from
the European Commission for financial incentives.
SGEFH is a subsidiary of the French Société Générale Group. The company joined
the EU/EBRD programme in 2004, since when over 230 micro and small leases have
been extended. SGEFH has been strengthening its focus on SME financing in
recent years and its portfolio is geographically well distributed.
Alfred Hagn, Managing Director of SGEFH, said that the company has recognised
farmers and rural cooperatives as a new market niche and this credit line is
an important boost for the company’s determination to expand its activities in
the agribusiness by targeting rural entrepreneurs.
François Lecavalier, EBRD Director for Hungary, Czech Republic, Slovak
Republic and Slovenia, said that this new loan will help Société Générale
penetrate deeper into the rural areas which are traditionally less developed
and reach out to farmers and rural enterprises which for years have been
outside the reach of the lease financing in the country. In addition, other
financial intermediaries are expected to follow, which will lead to increased
competition in the Hungarian rural finance sector.
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
€1,086.5 million has been committed to 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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