The Hungarian Development Bank has won EIB support for the development of its advisory division. The European Investment Bank (EIB) has concluded an agreement on the provision of a substantial credit line with two member organisations of the strategic group of the Hungarian Development Bank (MFB): Diákhitel Központ [the Student Loan Centre] now has access to a credit line of EUR 50 million, while Budapest Bank will receive a EUR 25 million credit line for financing its transactions. In addition, the Hungarian Development Bank (MFB) has signed a financing agreement with the EIB for the development of its advisory division.
MFB submitted a bid in February 2018 in response to the tender invitation of the EIB issued to national development institutions for strengthening local investment advisory services. In the context of the tender invitation that was issued via the European Investment Advisory Hub (EIAH), the MFB received funds for the creation of an advisory division as specified in its strategy. Under the newly concluded financing agreement, MFB will be able to create an advisory network aimed at projects that are implemented in the sectors targeted by the European Fund for Strategic Investment (EFSI), especially high volume transportation infrastructure projects, as well as the projects of the SME sector and the mid-cap corporate sector throughout Hungary.
The agreements that were signed between the European Investment Bank and two companies that are members of the MFB Financial Group, Diákhitel Központ Zrt. [Student Loan Centre Ltd.] and Budapest Bank, are aimed at providing preferential financing to the SME sector and the acquisition of marketable skills that meet the requirements of the jobs market. The EIB is granting a EUR 50 million credit line to Diákhitel Központ to fund loans granted to college and university students in Hungary. In 2005, the EIB provided a loan of EUR 100 million, in 2007, EUR 150 million, in 2010, EUR 145 million and in 2013, EUR 100 million to Diákhitel Központ. The amount available under the first three agreements has already been disbursed and placed with students, while the fourth will, according to the schedule, be fully used by 31 December 2018. The current, fifth, large loan will go towards funding the freely usable Diákhitel1 [Student Loan 1] loan facilities. The Hungarian student loan system has been offering financial assistance to higher-education students for 17 years, regardless of social and educational background. During this period, more than 392,000 students have taken advantage of the student loan opportunity, thus greatly increasing their chances of acquiring marketable skills and securing employment in the jobs market.
An agreement was signed with Budapest Bank for a credit line of EUR 25 million, as a result of which the financial institution will obtain an unsecured loan via the European Fund for Strategic Investment (EFSI) to be spent on refinancing SME loans. The bank is committed to providing low-interest loans to SMEs in the short term, in an amount equivalent to EUR 50 million, which is double the contract amount. This cooperation enables Budapest Bank to offer even more low-cost funds to its customers and provide effective support to small and mid-size businesses and thereby stimulate the economy.
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