EBRD supports small businesses in Hungary with €50 million bank loan

The EBRD’s Board of Directors has approved a €50 million credit to UniCredit Hungary in order to support the Hungarian economy in response to the global economic crisis.

 

The loan is part of the EBRD’s response to the global financial crisis, providing a flow of finance to the real economy in Hungary at a time of scarce alternative commercial funding. UniCredit Hungary has a country-wide network serving SMEs on a state of the art level.

 

Subject to the conclusion of legal documentation, the proceeds of this five-year credit would be used to provide medium and long-term financing to private SME companies, with a maximum of 249 employees and a maximum turnover of €50 million.

 

“This project acknowledges the key role played by UniCredit Hungary in financing the Hungarian small and medium sized business sector,” said the EBRD’s Head of Office in Hungary, Zsuzsanna Hargitai.

 

"I am very pleased to see that our Group's long-term partnership with the EBRD in Hungary has been strengthened even further. Thanks to this cooperation we can enhance the support of the Hungarian economy to overcome the recent challenging times, in a sustainable way", said Mihály Patai, CEO of UniCredit Bank Hungary.

The credit is part of a joint initiative with the UniCredit group to continue investing in eastern Europe and so keep funding open to the real economy.

 

The EBRD is making investments worth a total of €432.4 million in UniCredit subsidiaries across eight eastern European countries, as part of a joint effort to tackle the impact of the global economic crisis on the region.

 

The aim is to provide medium and long-term debt and equity financing through UniCredit subsidiaries in support of SMEs, lease finance and energy efficiency projects.

 

UniCredit is the largest banking group in the central and eastern European region, with over 4,000 branches in 19 countries. The group has invested around €10 billion of equity in central and eastern Europe and has around €85 billion of total customers loans in the region. Beside its own funding programs to its subsidiaries, it cooperates with international institutions including the EBRD in order to ensure continuing support to the local economies during these challenging times.

 

The EBRD investment is part of the joint pledge by the EBRD, the World Bank Group and the European Investment Bank (EIB) to provide over €24 billion in support of the banking sectors in the region and to fund lending to businesses hit by the global crisis.

The International Financial Institutions (IFIs) are working with key banking groups active in eastern Europe to deliver a rapid response to the financing requirements of individual subsidiaries and complementing the funding plans of the parents. This project with UniCredit is expected to be followed by similar investments in the eastern subsidiaries of other banking groups.

 

In response to the crisis, the EBRD has increased its planned investments in the financial sector by 50 percent to €3 billion this year. It has also announced a doubling of its funding to support important cross border commerce via its Trade Facilitation Programme.

In the first quarter of this year, the EBRD had made investments of €1.1 billion, a rise of 64 percent from the same period in 2008. Total investments of €7 billion are expected this year, up over 30 percent from 2008.

 

The individual components of the €432.4 million investment facility are the following:

 

 

About UniCredit:

 

UniCredit is a major international financial institution with strong roots in 22 European countries as well as representative offices in 27 other markets, with over 10,200 branches, approximately 174,000 employees at 31 December 2008. In the CEE region UniCredit operates the largest international banking network with over 4,000 branches and outlets in 19 countries. For further information, visit: www.unicreditgroup.eu