Background information

Under government decree 1038/2021 (5 February). The government is opening up a credit scheme for businesses to facilitate the relaunch for companies impacted by the COVID-19 pandemic. Applications for the loan must be submitted to the central bank and evaluation will be fast-tracked. The main criteria are that the company did not make a loss in 2019 as well as its current viability and operability. Funding will come from EU-REACT funds.

Content of measure

The maximum amount of the loan is HUF 10 million (€27,780) and it can be used for paying wages, social contributions, rent, operating costs or stocks with an annual interest rate of 0% for a maximum of 10 years. The loan amount cannot exceed the company’s revenue in 2019. No down payment is needed. Interest repayment begins after a three-year grace period following the transfer of the loan. Only one loan per company is available.

In the first phase the credit is targeted at tourism, restaurants and catering and sports sectors and their suppliers. From March 16 the circle of applicants was widened to include 55 different activities/sectors. These are:

• retail (NACE 4719-4779)
• road transport NACE 4939
• accommodation NACE 5510-5590
• food and drink services NACE 5610-5630
• film screening NACE 5914; Rental and leasing of personal and household goods NACE 772;
• travel agency and tour operators NACE 79; organisation of conventions and trade shows NACE 823,
• sports training and other education NACE 855, 856;
• live performance NACE 9001, 02, 04;
• museums, zoo, recreation NACE 91
• sports NACE 93,
• repairs NACE 952;
• hairdressers and personal services NACE 960

Use of measure

The government has budgeted HUF 100 billion (€277.8 million) for the credit scheme. The sectors in which companies are eligible for the loan were determined by the National Bank of Hungary, in consultation with the Hungarian Chamber of Commerce. The credit line is distributed so that applications from the capital of Budapest and the surrounding Pest county are capped at 40% of the budgeted amount. According to the central bank, more than 5,000 businesses applied for the loan in just the first four days of its launch and the average size of a loan was HUF 9.2 million

Target groups

Workers	Businesses	Citizens
Does not apply to workers	Solo-self-employed SMEs	Does not apply to citizens

Actors and funding

Actors	Funding
National government Employers' organisations	European Funds

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	No involvement	Consulted
Form	Not applicable	Unknown

Social partners' role in the implementation, monitoring and assessment phase:

• Unknown
• Main level of involvement: Sectoral or branch level

Involvement

The sectors in which companies are eligible for the loan were determined by the National Bank of Hungary, in consultation with the Hungarian Chamber of Commerce.

Views and reactions

No known views.

Sectors and occupations

This case is not occupation-specific.

Sources

• 05 February 2021: Govt decree 1038 on restart loan
• 22 February 2021: Govt to fund 10bn free loan from EU funds (www.portfolio.hu)
• 24 March 2021: MNB: More than HUF 10bn allocated in restart loans (www.mfb.hu)