Investment & Fund Management

The European Investment Fund (EIF) partnered with K&H Bank to address the financing challenges faced by small and medium-sized enterprises (SMEs) in Hungary. The specific issue was the limited access to finance for over 1,500 SMEs that were unable to secure loans through traditional banking channels. To tackle this, the EIF provided a guarantee under the COSME programme, which is supported by the European Fund for Strategic Investments (EFSI). This arrangement allowed K&H Bank to offer HUF 30 billion (approximately EUR 97 million) in loans, significantly increasing their lending capacity.

The tailored solution involved a 50% credit guarantee provided free of charge to clients, which aimed to stimulate borrowing among micro, small, and medium-sized enterprises. This initiative not only facilitated the provision of various loan types, including long-term overdraft facilities and working capital loans, but also streamlined the application process, reducing bureaucratic hurdles for businesses. The COSME guarantee programme was designed to support transactions up to 45 million forints per loan, which was particularly beneficial for SMEs seeking financing.

As a result of this collaboration, K&H Bank reported a substantial increase in its SME credit portfolio, which grew by 8% year-on-year, contrasting with the market's average growth of 1.8%. By the end of September 2015, the number of credited SME clients reached 9,200, indicating that one in every twelve domestic SMEs had received a loan from K&H. This initiative not only enhanced access to finance for SMEs but also contributed to job creation and economic growth in Hungary, aligning with the broader objectives of the EFSI to stimulate investment and support the European economy.