A quick, simple solution for the pre-financing of agricultural subsidies at MBH Bank

The newly available form of financing at the credit institution can be used for a total of more than thirty support titles, from crop cultivation to animal husbandry and even forestry, including the Agro-ecology Program (AÖP) introduced in 2023. “As one of the market-leading financiers of Hungarian agriculture, we want to provide our customers with a solution that is available in a short time and as simply as possible, so that they can access liquidity almost immediately in an often suddenly changing market environment, when predictability can be particularly important. Agricultural Factoring is like that. In addition, it is an extremely flexible option: they can request pre-financing for the grants they are entitled to either now or later.” – emphasized Dávid Hollósi, managing director of MBH Bank’s Agricultural and Food Business, highlighting the speed and simplicity of the process among the product’s advantages. “We can give up to 90 percent of the basic subsidies to farmers in a matter of days* in advance,” he said.

The bank recommends the product to both young and old

Agricultural factoring is recommended not only for smaller producers, but also for larger customers and those who previously did not use the possibility of bank support pre-financing, whether it is the arable plant growers who produce the largest output of domestic agriculture, or the livestock breeders. “It shows our commitment to Hungarian agriculture and the countryside that this is one of the first new products in our range, which we are introducing at an extremely important time, at the launch of the new Common Agricultural Policy,” explained Dávid Hollósi. Agricultural Factoring, jointly developed by MBH Bank’s Agricultural and Food Business, which has around 30,000 customers, and the newly established Factoring and Business Financing Directorate of the financial institution, became available shortly after the merger of MKB Bank and Takarékbank into MBH Bank at the beginning of May. “A new chapter has begun for us, in which the sector’s expert financing requires us to react even better to market changes and to help farmers adapt and increase efficiency with current, simple, and quickly available solutions. It is a sector of strategic importance, it is in the interest of all of us that the domestic production circle is strong.”

Agricultural Factoring can be applied for in approximately forty Agricultural Centers of MBH Bank throughout the country

For the time being, farmers can apply for the product for subsidies within the framework of the Unified Application submitted this year, but according to the plans, it can already be extended to the applications to be submitted next year from autumn, and in the longer term it will be possible to apply for it several years in advance. The documentation is simple, takes only a little time and, if necessary, can be compiled locally together with the bank’s colleagues experienced in agricultural financing. “We have structured the process in such a way that all of our customers who wish to benefit from support pre-financing – now or in the future – can enter into a framework contract with us in a matter of days. After that, pre-financing can be called up quickly – either immediately after the conclusion of the framework agreement or later, when liquidity is needed, regardless of any normative support. With a valid framework agreement, if the withdrawal conditions are met, the amount will be on the customer’s account within three working days,” said Dr. Tamás Molnár, managing director of MBH Bank’s Factoring and Business Financing Department. The process is further simplified by the fact that the framework agreement has no expiration date, and the bank will also waive its annual fee in 2023. “Anyone who signs this new framework agreement with our bank this year will only have to count on two transparent fees in the case of a specific support pre-financing request: disbursement commission and interest. In terms of interest, an additional advantage is that it only has to be paid when the Hungarian State Treasury allocates the support to the farmers, so the full amount of the pre-financing is available on the customer’s account even until the final payment date.”

In addition, MBH Bank launched the system with an advanced IT background, thanks to which customers are immediately informed by e-mail about all transactions – disbursements, settlements. “In this respect too, we are fast, predictable and reliable partners for them”, emphasized Dávid Hollósi and Dr. Tamás Molnár.