Borrowing in the corporate sector in Hungary, 2011-2020
HCIC’s Institute for Economic and Enterprise Research (IEER) analysed Hungarian companies’ borrowing habits and experiences. The data analysed here originate from the quarterly business climate surveys conducted by IEER focusing on perceived business loan eligibility requirements (16 times since October 2011) and on the types of loans taken out (18 times since October 2011). In this matter a total of 7129 Hungarian companies were surveyed. Below we shall present the results of the most recent quarterly business climate survey (January 2020) put into context by a timeline of the past decade’s credit trends in the second part of our analysis.
According to the results of the January 2020 survey 43 per cent of companies operated without any business loans to pay off. Their rate was especially high among 100-249 companies (49%) and in the processing industry (45%). Working capital credit was still the most popular type (38%), followed by investment credit (31%) in all industries regardless company size. As for currency, loans in forint (HUF) and euro (EUR) were generally taken out (67% and 51% respectively), the latter mostly by exporters. Loans were most commonly taken out by minor exporters (65%) and fully domestic companies (67%).
With regard to company size, investment credit was the most popular with companies employing over 50 staff (32-33%), while working capital credit was mostly chosen by 50-99 companies (39%) and 250+ companies (41%). The rate of processing companies taking out a working capital loan was especially high (43%), however, the rate of companies without any business loan was also the highest in this industrial sector (45%). At the same time, only 32% of companies offering economic services reported to have operated without business loans. The rate with trading and construction companies was 42%. All in all, investment projects were still not very popular among the smallest of the companies, while investment activity was more or less the same in all sectors.
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