The European Investment Bank (EIB) is to lend EUR 100 million to MKB Bank Zrt. (MKB) to finance projects undertaken by small and medium-sized companies (SMEs) and mid-cap companies. The EIB funds will support small-scale projects in the fields of energy, environmental protection, infrastructure, the knowledge-based economy, industry and services, including tourism.
This loan is the EIB’s contribution to the coordinated effort with other international financial institutions (the European Bank for Reconstruction and Development and the World Bank) to provide up to EUR 24.5 billion to support investments by SMEs, which have been badly hit by the global economic crisis, in the central and eastern European (CEE) region. The EIB is committed to contributing EUR 11 billion to this package, mainly in the form of lending to SMEs via banking partners such as MKB.
This is a new type of loan in line with the EIB’s priority of strengthening its support for Europe’s SMEs in the face of the current difficult market conditions. To that end the Bank has simplified procedures, increased the scope for financing by covering also intangibles and working capital and improved transparency by working towards a more effective transfer of the EIB’s funding advantage to the final beneficiary.
The loan will finance projects undertaken by SMEs (with fewer than 250 employees), with EUR 40 million going to midcap companies (with more than 250 and fewer than 3 000 employees), improving their access to long-term finance.
The current loan is a continuation of the successful cooperation between the EIB and MKB. The EIB previously provided two credit lines to this financial institution amounting to EUR 50 million in support of investments by SMEs.
European Investment Bank
The remit of the EIB, the bank of the European Union, 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 loans in Hungary totalling some EUR 10.6 billion, including the current loan. Out of this amount, EUR 2.7 billion has been for loans supporting the development of the entrepreneurial activities of SMEs, mid-cap companies and municipalities.
MKB Bank
MKB Bank is one of the oldest members of the Hungarian banking system, having started its operations in 1950. It is now the fourth-largest financial institution on the domestic market by balance sheet total. With its financial products and services it targets major domestic and multinational companies, quality medium-sized companies with good growth prospects, the upper and middle retail customer segments and small enterprises. MKB Bank is the leading member of the BayernLB Group in the CEE region.