Investment & Fund Management

The European Investment Fund (EIF) and K&H Bank collaborated 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 SMEs, which often struggle to secure loans due to stringent lending criteria. To tackle this, the EIF provided a guarantee under the COSME programme, enabling K&H Bank to offer HUF 30 billion (approximately EUR 97 million) in loans to over 1,500 SMEs that would otherwise be unable to obtain financing.

The tailored solution involved a 50% credit guarantee, offered free of charge to clients, which significantly reduced the risk for K&H Bank and encouraged them to increase their lending volumes. This initiative was designed to streamline the application process for SMEs, cutting down on time and bureaucratic hurdles. The COSME guarantee programme included various financial products such as long-term overdraft facilities, working capital loans, and investment loans, all aimed at supporting the growth of SMEs.

As a result of this partnership, K&H Bank reported a substantial increase in its SME credit portfolio, which grew by 8% year-on-year, in contrast to the market average 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 facilitated access to finance for thousands of businesses but also contributed to job creation and economic growth in Hungary, aligning with the broader objectives of the European Fund for Strategic Investments (EFSI).