„An extra wallet which can be opened”

According to László Krisán, general director of KA-VOSZ Zrt., Széchenyi Card has become a leading product in the market among small enterprises, filling a gap which traditional financing tools had not been able to fill. The concept of the Széchenyi card (conceived by Sándor Demján) was based on the idea that SME-s should be allowed easier access to financing. This solution acts as a kind of a bridge between creditors and debtors. The success of the Széchenyi card among FMCG businesses is due to the fact that it allows longer term credit for customers to be financed. It functions as an extra wallet which can be opened when wages or suppliers need to be paid. Its great advantage is that is does not cost anything when it’s not used, as it is free of hidden charges. So far, we have received 111,000 application and issued 83,000 cards, which account for HUF 425 billion of total financing granted. – What is the proportion of bad or doubtful debts? – The proportion of bad or overdue debts is only around 2,5 per cent at the moment, but this is expected to grow in the present situation. – How do you manage to keep this figure so low at a time when tens of thousands of enterprises are forced out of business? – Demand has not been reduced too dramatically in the FMCG sector, but the appearance of global chains has lead to intense competition. SME-s can fight big chains by offering more personalised service. Factoring can also be a useful tool in this struggle. – One of the specialities of the card is a blacklist of bad debtors. – An essential feature of this service is that it is based on personal responsibility. Applicants first visit one of our offices where we asses their financial position. One of the preconditions for submitting an application is authorising us to publish the name of our client in case he/she fails to fulfil his/her obligations. A private guarantee is also undertaken, which means their homes or other property don’t have to be mortgaged. The double risk of financial loss and negative publicity is a powerful incentive to fulfil obligations.