The European Investment Bank (EIB) is providing two loans to Magyar Fejlesztési Bank Zrt. (MFB - Hungarian Development Bank) totalling to EUR 200 million to finance small and medium sized investments and a loan of HUF 38 billion (approx. EUR 141 million) to the Student Loan Centre (Diákhitel Központ). The latter loan will be channelled into loans financing costs incurred by students pursuing undergraduate and graduate degrees at Hungarian Higher Education institutions.
Mr. Anton Rop, EIB Vice-President responsible for lending in Central Europe, including Hungary, stated: "I welcome very much that EIB funds will improve the access of Hungarian SME and mid-cap companies to medium and long-term financing that is important for them to face successfully the consequences of the current economic and financial crisis. At the same time, the EIB co-financing will help to increase accessibility of higher education in Hungary to a larger number of students with positive implications to the country's sustained economic growth and employment".
The loan of EUR 100 million to MFB Bank will finance smaller projects of public sector promoters, involving local and regional authorities,as well as public and private utility companies and SMEs. In the case of public promoters, the EIB support can reach up to 50% of total individual investment costs, while the EIB funds can finance up to 100 % of projects promoted by SMEs.
Another EIB loan of EUR 100 million to MFB Bank will support projects implemented by "midcap" companies. In this case, the EIB financing can represent up to 50 % of total individual project costs.
Both loans are a continuation of the successful cooperation of the EIB with the MFB Bank. Together with these loans, the EIB will have provided MFB with funds to be onlent to SMEs and midcaps amounting in total to EUR 645 million.
The EIB loan of EUR 141 million to Diákhitel is the third loan to this Student Loan Centre. Before, the Bank provided support to Diákhitel totalling EUR 250 million. This sum is currently almost fully distributed for the benefit of some 220,000 financially constrained students to cover their costs related to higher education.
Note to editors:
The EIB, the European Union's bank, finances economically viable investment projects that contribute towards the integration, balanced development and economic and social cohesion of the EU Member States. Since 1990, EIB lending in Hungary (including the loans signed today) has reached EUR 12.6 billion.
EIB intermediated loans finance smaller projects implemented by SMEs (with less than 250 employees) and midcap companies (with more than 250 and fewer than 3 000 employees) and local authorities. Since 1990 the EIB provided EUR 3.2 billion to support smaller projects in Hungary. The EIB joins its forces with well established financing institutions, like the MFB Bank, that know the local market, have SMEs, midcap companies and local authorities as their customers and have a well developed network and alternative distribution channels.