First in Europe: enterprises have been granted EU micro-credit29 January 2008
Micro-enterprises borrowing New Hungary Micro-Credit were approved financing within a few days. Thanks to EU funding, within the framework of the Jeremie programme the credit scheme provides opportunities for at least 50-60 thousand micro-enterprises by offering extremely favourable terms of financing for up to 5 years with a 2-year grace period, at a 6.5% interest rate and without deducting bank service charges, for companies recording a net annual revenue of maximum 200 million HUF.
The portfolio is now available via the consortium comprised of the Hungarian Foundation for Enterprise Promotion (MVA) and leading micro-enterprise interest groups, which network will continue to expand in the future. From among the 12 recently acceded member states of the EU, Hungary was the first country to introduce this EU financed credit scheme granting reimbursable funding on the market. The New Hungary Entrepreneurship Programme may spend 83 billion HUF for this purpose up to 2013.
Competing mediating organisations will mediate the New Hungary Micro-Credit to enterprises. MiFiN – Micro-Financing Financial Services CC – was the first organisation to join the programme. The organisation was established via the collaboration of the Hungarian Foundation for Enterprise Promotion (MVA), micro-enterprise interest groups (IPOSZ, OKISZ, KISOSZ, ÁFEOSZ), as well as local enterprise development foundations (HVKs). The management promised that the amount of financing requested would be transferred within 24 hours if all documents needed for contracting have been submitted. New Hungary Micro-Credit is now available in every county centre via MIFIN mediation. Several hundreds of enterprises have contacted MIFIN since the programme was announced 2 weeks ago, and the first contracts have already been concluded.
Additional mediating organisations will soon join in the promotion of the New Hungary Micro-Credit scheme, which competition is expected to engender further improvement to the terms of financing.
The New Hungary Micro-Credit scheme provides funding for enterprises whose respective market position cannot be strengthened, or at least cannot be sufficiently strengthened by opting to use commercial banking methods. Experiences demonstrate that there are many well-developing and promising micro-enterprises operating on the market, which, on the basis of their results and indices would be creditworthy, however are nevertheless unable to receive bank financing due to the rigorous financing criteria (Such as, the enterprise has not been operating long enough, or is unable to provide sufficient securities/guarantees.)
One of the key objectives of the New Hungary Development Plan is to prioritise the support of small- and medium-size enterprises, which is essential for improving Hungarian competitiveness indices.
The next type of EU reimbursable funding scheme, namely, the New Hungary Guarantee scheme underpinning bank credits, is also expected to be launched in the first quarter, which scheme will provide credit guarantee opportunities for small- and medium-size enterprises, even for credit of up to 100 million HUF in value.
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