The European Investment Bank (EIB) is lending EUR 100m to Hungarian Development Bank Ltd. (Magyar Fejlesztési Bank Zártkörűen Működő Részvénytársaság – MFB) to finance projects by mid-cap companies in Hungary.
This is the first intermediated loan provided by the Bank in Hungary that will support only projects implemented by mid-cap companies (with more than 250 and fewer than 3 000 employees) and improve their access to long-term finance. This is very important particularly during the current financial crisis. To this end, the EIB joins forces with well-established financing institutions, like MFB, that know the local market and have midcap companies as their customers.
EIB funds will finance up to 50% of the cost of small and medium-sized projects, with a maximum of EUR 25m for an individual project, in the areas of industry, transport, environmental protection, energy and energy savings, infrastructure and services, including tourism.
This loan is a continuation of the successful cooperation between the EIB and MFB. Previously, the EIB has provided five credit lines to this financial institution amounting to EUR 360m in support of SME investment.
Background:
The mission of the EIB, the European Union’s bank promoting European objectives, is to contribute to the integration, balanced development and economic and social cohesion of the Member States by financing sound investment.
Since 1990 the EIB has provided some EUR 10.2bn in loans in Hungary, including this loan. Of this amount, the sum of EUR 2.4bn represents loans supporting the development of entrepreneurial activities of SMEs, mid-cap companies and municipalities.