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FGS Go! outlays reach HUF 2.91 tln

MNB

Photo by Adriana Iacob/Shutterstock.com

Outlays of the Funding for Growth Scheme (FGS) Go!, a central bank program that aims to ensure SMEs cheap credit during the coronavirus crisis, have reached HUF 2.91 trillion, 97% of the HUF 3 tln allocation, the National Bank of Hungary (MNB) said on Friday.

The credit went to around 40,000 businesses, MNB said.

The central bank launched FGS Go! - an extension of its Funding for Growth Scheme started in 2013 - in April 2020 to mitigate the economic fallout from the coronavirus crisis. Under the scheme, MNB is providing lenders with 0pc financing for microbusinesses and SME loans with fixed rates capped at 2.5%. The scheme is open to a broader range of businesses and conditions have been eased.

The bank said 37% of FGS Go! contract volume went to new investments, while 53% was for working capital and 10% was for refinancing earlier investment loans. About three-fourths went to SMEs in commerce, manufacturing, property development, farming, and construction. Close to one-third of the credit went to microbusinesses, and one-third was disbursed to small businesses.

MNB's Monetary Council announced the closure of FGS Go! with the exhaustion of its HUF 3 tln allocation after a monthly policy meeting in June. The rate-setters said the pick-up in the economic recovery had made it possible for MNB "to phase out certain crisis management tools".

More than 74,000 businesses have drawn on HUF 6.3 tln of credit in the framework of the eight-year-old FGS. The central bank estimates the program has contributed about 4.5 percentage points to GDP growth in recent years.

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