MICROCAPITAL BRIEF: FM Bank of Poland Signs $24.6m Agreement with European Investment Fund (EIF), Guaranteed By European Progress Microfinance Facility (EPMF)

FM Bank, a Polish financial institution specializing in servicing micro- and small enterprises, has signed an agreement for a loan of PLN 68.7 million (USD 24.6 million) from European Investment Fund (EIF), which invests in institutions that finance small and medium-sized enterprises (SMEs). The loan, which will be used to on-lend to start-up enterprises, will be made under a 75-percent guarantee from the European Progress Microfinance Facility (EPMF), which seeks to enable microfinance institutions (MFIs) within the EU to increase lending to entrepreneurs by issuing guarantees, loans and equity financing. Under the agreement, FM Bank will provide Polish entrepreneurs loans of up to EUR 25,000 (USD 35,600) for enterprises that have been operating for less than one year [1]. Currently, entrepreneurs with less than 12 months of business history are excluded from external financing in Poland according to EIF.

The CEO of FM Bank, Magdalena Dulczewska, said, “Entrepreneurs just starting operations are still treated as a high-risk group by banks. That is why, together with EIF, we want to provide financing to start-ups, so needed especially during the first stages of business…We believe that with those measures start-ups will get chance to boost their growth significantly” [1].

By: Alexandra Pattee, Research Associate

About FM Bank: FM Bank is a Polish financial institution that provides commercial and private banking services, specializing in servicing micro- and small enterprises. Founded in 2010, FM Bank’s shareholders are Abris Capital Partners, a private equity fund based in Poland; International Finance Corporation (IFC), the private-investment arm of the World Bank Group; and Mr Piotr Stepniak, an independent investor. Abris Capital Partners also owns Fundusz Mikro, a microfinance institution affiliated with FM Bank. Financial information is not available for FM Bank.

About European Investment Fund (EIF): The European Investment Fund (EIF) is a provider of risk finance to lenders to small and medium-sized enterprises (SME) in Europe. The fund is a public-private partnership whose shareholding structure includes the European Union’s European Investment Bank; the European Union, represented by the European Commission; and 29 financial institutions from European Union member states plus Turkey and Croatia. EIF is a member of the EIB Group, the parent organization of the European Investment Bank. As of December 31, 2009 EIF reported total assets of EUR 1.2 billion (USD 1.6 billion).

Sources and Resources:

[1] European Investment Fund Press Release, “FM Bank signed a guarantee agreement under EPMF for PLN 68m (EUR 17.7m) for financing start-up micro-enterprises”, Submitted directly to MicroCapital

MicroCapital.org Article, April 5, 2011, “European Commission’s ‘European Progress Microfinance Facility’ Looks to Ease Access to Credit for Small-business, Signs Agreement with Mikrofond AD of Bulgaria”, https://www.microcapital.org/microcapital-brief-european-commissions-european-progress-microfinance-facility-looks-to-ease-access-to-credit-for-small-business-signs-agreement-with-mikrofond-ad-of-bulgaria-2/

MicroCapital.org Article, February 28, 2011, “European Investment Fund (EIF) of Luxembourg Makes $1m Equity Investment in Italian Microfinance Institution (MFI) PerMicro”, https://www.microcapital.org/microcapital-brief-european-investment-fund-eif-of-luxembourg-makes-1m-equity-investment-in-italian-microfinance-institution-mfi-permicro/

MicroCapital.org Article, October 19, 2010, “European Bank for Reconstruction and Development (EBRD) Loans Masterlease $28m to Support Small and Medium-Sized Enterprises (SMEs) in Poland”, https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-loans-masterlease-28m-to-support-small-and-medium-sized-enterprises-smes-in-poland/

MicroCapital.org Article, August 2, 2010, “European Investment Fund Implements $32m Guarantee Under the European Progress Microfinance Facility for Employment and Social Inclusion”, https://www.microcapital.org/microcapital-brief-european-investment-fund-implements-32m-guarantee-under-the-european-progress-microfinance-facility-for-employment-and-social-inclusion

MicroCapital.org Article, May 18, 2010, “European Bank for Reconstruction and Development (EBRD) Provides $63m Loan to Polish Bank BGZ to Support Micro-, Small and Medium-sized Enterprises (MSMEs)”, https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-provides-63m-loan-to-polish-bank-bgz-to-support-micro-small-and-medium-sized-enterprises-msmes/

MicroCapital.org Article, February 26, 2010, “European Commission Launches $135m Microfinance Facility”, https://www.microcapital.org/microcapital-brief-european-commission-launches-135m-microfinance-facility/

MicroCapital’s Microfinance Universe: The European Investment Fund (EIF), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=European+Investment+Fund

MicroCapital’s Microfinance Universe: FM Bank, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=FM+Bank

Browse the MicroCapital Universe and add your entry to the wiki at: https://www.microcapital.org/microfinanceuniverse/

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