PARIS, 22-Mar-2018 — /EuropaWire/ — The Council of Europe Development Bank (CEB) approved a €75 million loan to the Hungarian Development Bank (MFB) to provide a credit line to MSMEs and finance projects in municipal infrastructure development and the education sector.
The MFB is a state-owned specialised credit institution, mandated to promote the development and modernisation of the Hungarian economy by helping to implement the economic policy of the government. In the last two decades, the CEB has approved €735 million in loans to the MFB for investments in urban development, job creation, public infrastructure, and environmental protection.
The latest CEB loan approved will channel financing to MSMEs across the country, particularly businesses in Central Hungary and remote areas such as the Great Plain region, which often have difficulty accessing financing from commercial banks. The aim is to stimulate innovation and development in small businesses and increase their competitiveness in order to contribute to job creation and preservation. The CEB will also partially finance the MFB’s “Solar Panel Farm Financing Programme”, which will be of particular benefit to farms and agricultural companies.
In addition, CEB funds will be used to finance infrastructure development at the local level through the MFB’s “Municipal Infrastructure Development Programme 2020” and “Public Transportation Development Programme”, and will also finance the Student Loan Centre, which provides student loans in higher education to help with living expenses and study costs.
The CEB loan is expected to have a positive impact in several areas. It will strengthen the Hungarian MSME sector and make an important contribution to job creation and preservation. It will also improve living conditions in urban and rural areas through the modernisation, renovation and development of local infrastructure, including of public transport. The construction of solar panel farms across the country will help to produce cheaper renewable energy. And the financing to the Student Loan Centre will facilitate access to higher education.
Commenting on the loan approval, CEB Governor Rolf Wenzel said: “MFB is a long-standing partner of the CEB. We are pleased that through this cross-sectoral loan we will be able to support crucial areas of the Hungarian economy, namely MSME financing, public infrastructure development, and education, with clear benefits in terms of job creation, improved living conditions in urban and rural areas, a greener economy, and easier access to higher education.”
Set up in 1956, the CEB (Council of Europe Development Bank) has 41 member states. Twenty-two Central, Eastern and South Eastern European countries, forming the Bank’s target countries, are listed among the member states. As a major instrument of the policy of solidarity in Europe, the Bank finances social projects by making available resources raised in conditions reflecting the quality of its rating (Aa1 with Moody’s, outlook stable, AA+ with Standard & Poor’s, outlook positive and AA+ with Fitch Ratings, outlook stable). It thus grants loans to its member states, and to financial institutions and local authorities in its member states for the financing of projects in the social sector, in accordance with its Articles of Agreement.
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