BUDAPEST, HUNGARY, June 28, 1999 –The
International Finance Corporation today signed an agreement to invest in
a Hungarian leasing company, an important step in supporting the development
of small and medium enterprises.
IFC will make a 24 percent equity investment for HUF240 million (approx.
US$1 million) in Axon Vagyonkezelö, Organizációs és Befektetési Részvénytársaság
The investment will go towards expansion of Axon, a leading agricultural
and equipment leasing company based in Szolnok, in Eastern Hungary. The
company also has offices in Debrecen, Szeged, Pecs and Budapest.
IFC's investment follows a parallel investment of the same amount by the
Hungarian bank Inter-Europa Bank (IEB). IFC and IEB will each own 24 percent
of the company, and the existing shareholders of the company would own
the remaining 50 percent. The investment will also include a technical
Mr. Harold Rosen, Director of IFC's Central and Southern Europe Department,
said the investment would strengthen Axon's niche in the small and medium
enterprise (SME) sector, particularly in agriculture. That, in turn, would
foster development of SMEs in Eastern Hungary. He noted that, generally,
in industrialized countries 25 percent of all investments are financed
through leasing, the most important form of funding for SMEs. Only 15 percent
of investments are financed through leasing in Hungary, indicating potential
for significant growth.
The mission of IFC, part of the World Bank Group, is to promote private
sector investment in developing countries, which will reduce poverty and
improve people's lives. IFC finances private sector investments in
the developing world, mobilizes capital in the international financial
markets, and provides technical assistance and advice to governments and