Credit Crunch in Hungary between 2009 and 2013: Is the Creditless Period Over?

This article provides a review of the Hungarian credit crunch between 2009 and 2013, including its causes and its nature, with particular regard to a factor playing a crucial role in growth: SME-lending. It is argued that, although the indebtedness of the corporate sector was much less excessive and unhealthy in structure than that of the household and the public sectors, the disruptions of the financial intermediary system resulted, to a large degree, in the decline in corporate lending. The article then goes on to present the Funding for Growth Scheme (FGS) and the economic logic behind its operating mechanism. Finally, it assesses the impact of the first phase of the programme on lending and economic growth, and it concludes that the FGS helped the Hungarian economy extricate itself from the downward spiral of the credit crunch.