The European Investment Fund (EIF) and K&H Bank have signed the first COSME agreement in Hungary, benefiting from the support of the European Fund for Strategic Investments (EFSI), the heart of the Investment Plan for Europe.

The EU support will allow K&H Bank to provide HUF 30bn (ca. EUR 97m) to over 1,500 small businesses in Hungary. EIF will provide K&H Bank with a guarantee under the COSME programme with financial backing from the European Commission allowing the organisation to increase its lending volumes over the next 3 years, by providing loans to SMEs that would otherwise not have received financing.

EU Commissioner for Education, Culture, Youth and Sport, Tibor Navracsics, said: “Helping to boost economic growth by triggering new investment is the Commission’s top political priority. That is why I welcome today's announcement that K&H will provide fresh loans worth nearly €100 million to small businesses in Hungary with support from the EIF and the Investment Plan. I encourage Hungarian SMEs to contact K&H with their business proposals to make the most of the opportunities opened up by this new deal.”

Commenting on the signature, EIF Chief Executive, Pier Luigi Gilibert, said: “I am delighted to be signing the first EFSI SME guarantee agreement in Hungary under the COSME programme. Increasing access to finance is one of the fundamental driving forces for EFSI and this deal helps to achieve this aim. We are proud to partner with K&H Bank to target underserved SMEs which can contribute to creating jobs and growth in both Hungary and across Europe.”

Hendrik Scheerlinck, Chief Executive at K&H Bank, said: "K&H Bank is the first institution in Hungary to make the COSME European Union guarantee program available. The programme will grant 50% credit guarantee, free of charge to clients, in order to boost borrowing by micro-, small and middle size enterprises. The conclusion of this agreement proves that K&H can and wants to lend. The COSME guarantee programme will, in line with the Bank’s strategy, contribute to our goal of providing new financing to a larger number of business companies. Additionally, the EU guarantees will have a positive impact on K&H Bank’s capital adequacy too, allowing us to further increase our lending volumes.”

dr. Ágnes Bába, Deputy Chief Executive at K&H, said: ”The COSME guarantee programme provides a 50% guarantee to SMEs free of charge for a maximum of 45 million forint per transaction. Long-term overdraft facilities, working capital loans, investments loans (including Phase III of the new Funding for Growth Scheme), bank guarantees and the K&H business support credit product to be introduced are all included in the scheme. Applying for a COSME guarantee, which is free of charge for clients, is managed in the credit assessment process currently applied by K&H, so it cuts both time and red tape for businesses. It would help in financing thousands of customers during the life of the programme if calculating based on the average SME loan size of HUF 15-20 million.”

This deal reflects the EIB Group’s commitment to respond swiftly to calls from Member States, the European Commission and the European Parliament for a rapid launch of concrete initiatives under EFSI, accelerating lending and guaranteeing transactions capable of boosting jobs and growth in the EU.