The Hungarian Chamber of Commerce and Industry (MKIK) asks the government to consider the immediate introduction of an interest ceiling, similar to retail lending. According to the organization, its level should be set in the range of 5-10 percent. The chamber indicated: it is also worth considering the possibility of a moratorium for existing business loans, reads the statement of the MKIK.

The Hungarian Chamber of Commerce and Industry considers simplification necessary in the entrepreneurial sector. According to the organization's reasoning, the proposal is justified by the Hungarian National Bank's (MNB) decision on Friday, as the banks practically immediately incorporated the new one-day deposit tender into their pricing, which rose to 18 percent. At the same time, the upper edge of the interest corridor, which shows how far the MNB can go with interest rate increases, increased from the previous 15.5 to 25 percent.

- The entrepreneur will feel both of them very quickly, both the one who wants to get a loan and the one who pays the loan - said László Parragh, the president of the MKIK. According to him, with this decision, it almost doesn't matter what the base interest rate is, since it is much higher, and banks calculate based on this for their own lending, that is, it counts as the guiding interest rate.

- The three-month BUBOR is currently 16.5 percent, plus a bank profit margin of about 4 percent, i.e. companies that are now repaying loans with variable interest rates will, after the interest rate reversal day, pay much higher than before - even exceeding 20 percent - installments have to be managed. And those who are now thinking about taking out a loan will only find loans on much less favorable terms than before, the president added.

László Parragh also explained that thanks to the interest ceiling and the moratorium, this does not mean a sudden negative change for those paying off household loans. Businesses that have just recovered from the coronavirus crisis and are currently struggling with the energy crisis will face a huge blow.

– This will have an irreversible effect on their operation, they may even suspend or terminate it. Moreover, they can even get rid of their employees, explained the president. The MKIK agrees with the economic point of view that a crisis can be really deepened and dragged out in time if we let lending collapse.

Based on all this, the chamber asks the government to consider the immediate introduction of the interest ceiling for businesses. Its level should be set in the range of 5-10 percent.

It is worth thinking about securing the possibility of a moratorium for existing variable interest rate business loans, as long as the economic situation requires it. With these measures, those in trouble can avoid another blow, and we can avoid drying up in the credit market, the announcement reads.

Source: Hungarian Nation

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