What could bring classic SMEs closer to the capital market? Are Hungarian companies open to such financing options?
MFB Invest plays an educational role in increasing SMEs’ awareness about capital investments and other available financing options beyond banks. Our aim is to familiarise as many businesses as possible with capital investment as a way of financing. It is a big step forward when our consultations with a company manager reach the stage when we can draw up tailored arrangements. The real breakthrough comes when our colleagues can convince them that we have the same goals, because we also make a long-term commitment to them and become actual owners through our investments. And contrary to financial institutions, we are cooperative if they run into hard times, and we help owners to overcome problems. It is important to clarify this. This kind of financial education is not easy, as there is no established tradition or roots of this kind in Hungary yet. This is partly why we are planning to cooperate more closely with the BSE.
What is the management’s strategy and what are its most important short-term tasks?
Our primary goal is to provide capital financing for small- and medium-sized enterprises to the broadest extent possible. We would like to introduce corporate bond subscription as a new financing option. Given the current low interest rates, this could be an attractive capital-raising option for businesses whose owners do not want to involve another funding agent through an external owner, but where financing the business from loans is also difficult.
Another important element of our strategy is setting up new funds alongside our existing venture capital funds. Such a new fund is the soon-to-start urban capital fund, which we have set up to provide refundable support or other resources for the recipient cities and towns to implement their urban development goals through capital investments. We are currently negotiating about the launch of new capital funds, with the Stock Exchange, among others.
What do you think might affect the market of capital investments in the next years?
Primarily the continual development of IT and its capital requirement. Because of its role, however, MFB Invest focuses on classic investment areas—although these gives us plenty to do. It is clear that a considerable number of businesses established at the time of the political changes in 1989-1990 are now struggling with intergenerational succession. The MFB Group would like to help family businesses who are not able to resolve succession issues within the family. The goal of the recently launched programme is to co-finance investors or investor groups. Our company will support the setting up of the new ownership structure through capital financing.