Government looking into extending loan moratorium for vulnerable

The government will decide whether to uphold the loan moratorium for vulnerable borrowers after consultation with the Hungarian Banking Association and the National Bank of Hungary (NBH), a government official said.

In an interview published in the Friday edition of business daily Vilaggazdasag, Andras Tallai, a state secretary of the finance ministry, welcomed the association’s proposal to extend the moratorium introduced to protect borrowers hit hard by the fallout of the coronavirus pandemic. The moratorium is set to expire at the end of June.

Earlier in the week, Hungarian Banking Association told MTI the body backs continued, targeted support for retail and corporate borrowers who have suffered significant losses because of the coronavirus crisis.

Tallai noted that the number of retail borrowers participating in the repayment moratorium fell from 1.6 million in April 2020 to 1.3 million at the end of February, citing NBH data. The share of corporate borrowers in the moratorium has dropped by 21 percentage points since May 2020 and now stands around 35,000, he added.

In terms of lending stock, around half of retail credit and 35 percent of corporate loans are in the moratorium at present.

Tallai said the moratorium had left 1,700-1,800 billion forints (EUR 4.8-5.0bn) in the economy by the end of 2020, equivalent to 3.6-3.8 percent of GDP.

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