The European Investment Bank and CIB Bank have launched a €200 million initiative to increase lending to mid-sized Hungarian companies under a new risk-sharing agreement.
The deal centres on a €100 million guarantee from the EIB to CIB Bank, part of Italy’s Intesa Sanpaolo Group, to back additional loans to so-called “mid-caps” — businesses that are bigger than small firms but smaller than large corporations, the EIB informed on Friday.
CIB is expected to provide up to €200 million in new lending under the arrangement, with the wider support expected to mobilise about €280 million in investment by Hungarian companies.
The EIB said the guarantee is intended to allow CIB to lend more with longer repayment periods and lower collateral requirements.
More than 60% of the financing is expected to go to companies in less-developed regions of Hungary.
First Growth for MidCaps guarantee in Hungary
The agreement is the first time the EIB’s Growth for MidCaps (G4M) guarantee programme has been used in Hungary, the bank said.
EIB Vice-President Marko Primorac noted that mid-sized companies could “drive innovation and create high-quality jobs” but may lack access to the financing options available to major corporations.
CIB Bank Chairman and CEO Luigi Fuzio said the deal “marks the relaunch” of collaboration between the two institutions and would support the bank’s lending to mid-sized enterprises.
The EIB and CIB stated that their cooperation has been renewed after 15 years, with the latest agreement focused on expanding financing opportunities for Hungarian mid-sized businesses.
