GARANTIQA'S INITIATIVE HAS BEEN APPROVED IN BRUSSELS

In future, Garantiqa Hitelgarancia Zrt can give a bigger guarantees (up to 90%) compared to what was previously possible, after the EU has approved the initiative of the company regarding the givable state aid to small and medium size enterprises.

Garantiqa can provide a guarantee for up to 90% of the loan principle + interests, if the loan amount does not exceed the yearly gross salary cost of the debtor.. The state aid content, in the form of the guarantee, has simultaneously been raised by the EU from 200.000 to 500.000 Euros. "This is a very serious step forward, since we could only give guarantees up to 80% of a loan amount until now (supported by a state counter-guarantee), but in the future, this will be possible up to 90%" - according to György Radnai, Chief Executive Officer of Garantiqa.

The CEO said that the EU-modifications have been initiated by the organisation just after the outbreak of the crisis, because they estimated the significance of credit guarantees to grow in the currently troubled times. The issuance of loans, especially working capital finance has been made more strict, which has led many enterprises into a difficult situation. The crisis appears at Garantiqa in a way that there is an increasing need for the guarantees of the company within the ever decreasing number of issued SME loans, and even such companies appear in the portfolio, which previously had not been in need of any guarantees. A new phenomenon in the life of Garantiqa is that even companies belonging to the top 10% of the SME sector appear with guarantee needs on the market. Obviously this means ever bigger loan amounts to be guaranteed. "What has not been typical so far has happened several times lately - the EU boundaries of state aid have been in effect, in other words, some requests had to be declined because of the upper limit"- explained György Radnai.

According to the CEO, the initiative towards the EU about regulation modifications was just in time, since the Union has become more open towards measures that make the access to credit easier. Simultaneously, Garantiqa's guarantee portfolio limit (supported by state guarantee) has been doubled by the government compared to the 450 billion HUF in 2008, meaning the state budget limit will most certainly not become any obstacle for guarantees with bigger risk taking than previously, towards companies that were not possible to guarantee before, or in case of loans that are bigger than before.