Hungarian central bank taking on credit risk from SME loans

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The National Bank of Hungary is launching an extension to its funding for growth scheme (FGS) that will see it take on some of the credit risk associated with loans to small and medium-sized enterprises (SMEs).

The central bank launched the FGS in 2013 in an effort to boost lending to SMEs. Although this "played a key role in stopping [the] steady contraction in corporate lending", it has failed to generate the kind of "robust rebound" the central bank was hoping for.

Banks have already drawn do

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