New regulations to support small and medium-sized enterprises come into force

With new regulations Bank Gospodarstwa Krajowego will guarantee to grant credits to small and medium-sized enterprises through commercial banks.

27 February 2013 new regulations come into force, according to which a risk borne by banks during providing credit facilities to enterprises will be partly taken by Bank Gospodarstwa Krajowego (BGK). Before, the BGK's aid was connected with commercial basis and alternatively with individual state aid. Support is addressed to micro-, small and medium-sized enterprises. A guarantee offered by Bank Gospodarstwa Krajowego includes 60% of the credit amount and is granted at the request of an entrepreneur. The granted guarantee is protected with a blank sola bill given by the entrepreneur for the benefit of BGK. New regulations are related to the amendment of the Law on guarantees issued by the State Treasury and legal persons as well as the executive order of the Minister of Finance, which also is applied to this law.

"For today, we know that the aid will be granted to micro-, small and medium-sized enterprises. It is a good idea, and this whole support may amount to 40-50 billion PLN. This is an enormous sum of money, and it is going to be provided via banks," informs Jerzy Bratnik, the President of the Polish Crafts Association, "I had been observing a number of funds which supported companies' business activities via banks. And banks usually enjoyed a guaranteed safety, whereas micro-, small and medium-sized enterprises did not. Since at the moment 3-4 % of people pursuing business activity benefit from bank credits, it raises my concerns if this new mechanism is going to be effective."

Currently, companies are expecting financial support which will enable them faster development. The President of the Polish Crafts Association underlines the fact that the key to success of new regulations will concern proceedings of banks and BGK. "Polish-American Enterprise Fund, which was given at banks disposal to distribute aid among entrepreneur for development, in practice proved to be a little effective tool because operators were banks. Therefore, this situation may repeat also now, however, it does not have to," says Jerzy Bartnik.

The proper conduct of regulations may be hindered by the way banks evaluate creditworthiness of enterprises. "In order to assess enterprise's creditworthiness, a number of economical measures must be taken. This is done by banks according to a particular pattern, also developed by them. And this is the first hindrance which entrepreneurs may meet when applying for such support. I think that this already indicates less efficiency. Practice will show the future," says the President of the Polish Crafts Association.

Another essential factor is also enterprises' reluctance to contract credits because of their risk awareness. As Jerzy Bartnik underlines, "Banks' criteria, which we have met so far, did not encourage to contract a credit because in the case of enterprises I represent, which are mostly represented by natural persons, a credit is secured with one's property, and not everyone dares to do it."

In accordance with the law which is coming to force, the Minister of Finance is to transfer funds in order to increase the statutory fund of Bank Gospodarstwa Krajowego. Additionally, the Minister is to cover costs and expenditures of banks, connected to granting of guarantees and sureties. Whereas the Minister's of Finance order, which now is coming into force, forecasts that the total amount of aid for one company cannot exceed €200,000 in the current years as well as two preceding years.


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