The National Bank of Hungary unveils incentives to support return to market lending

Budapest, November 3 (MTI) – The National Bank of Hungary on Tuesday unveiled a package of incentives to support a return to market lending.

The package dubbed Market Credit Scheme was launched at the same time the central bank detailed the final phase of its Funding for Growth Scheme that provides banks with zero percent financing for cheap corporate loans.

The incentive scheme comprises an interest rate swap (IRS) tied to lending activity complemented by a preferential deposit, incentives affecting banks’ capital reserve requirements and access to a corporate credit information system the central bank is establishing.

The central bank will also launch a Growth Support Scheme (GSS) in January with the aim of increasing the banking sector’s lending to small and medium-sized firms by 250-400 billion forints, or around 5-10 percent of total corporate lending stock, in 2016.

The GSS comprises the final phase of the NBH’s Funding for Growth Scheme (FGS) as well as a package of incentives for active lenders.