MICROCAPITAL STORY: EBRD Lends $34.9m to Polish Leasing Companies BZ WBK Leasing and BZ WBK Finance and Leasing

The EBRD has granted a EUR 25 million (USD 34.9 million) loan to each of two leasing subsidaries of Poland´s third largest bank and fourth largest leasing company, Bank Zachodni WBK. The subsidiaries, BZ WBK Leasing and BZ WBK Finance & Leasing, , provide medium- and long term lease financing to Polish small and medium enterprises (SMEs). Lucyna Stanczak, EBRD Director for Poland, commented“The loans will play an important role in keeping up leasing financing to SMEs outside the large cities at a time when funds are needed more than ever.” MicroCapital has also reported on EBRD´s February 2009 loan of USD 3.8 million to Inicjatywa Mikro, a microfinance institutuion (MFI) in Poland. The loan was directed towards micro and small Enterprise (MSE) development. According to the EBRD, only 3 percent of registered micro and small enterprises are financed by mainstream financial institutions. Microleasing, a new area of exploration for the EBRD, can allow business owners to use equipment without investing in its purchase. A list of past EBRD microleasing projects can be found here.

BZ WBK holds 99.99 percent of equity in both BZ WBK Leasing and BZ WBK Finance and Leasing. BZ WBK Leasing, founded in 1996, reports total paid-up share capital of USD 37.5 million. Services for businesses include car leases, leasing for doctors and veterinarians, and loans for farmers. Car loans are also offered to individual customers. BZ WBK Finance and Leasing, founded in 1998, reports total paid-up share capital of USD 15.5 million. In contrast to the car leasing focus of BZ WBK Leasing, BZ WBK Finance and Leasing specializes in leasing machines, computers, and office equipment in addition to offering leasing for doctors and vets.

The leasing companies have access to the name and resources of a major national bank. BZ WBK was formed by the 2001 merger of Bank Zachodni WBK and Wielkopolski Bank Kredytowy. BZ WBK reports funds of USD 616.6 million and assets totaling USD 7.7 billion. 70.5 percent of BZ WBK stock is held by the Allied Irish Banks Group. BZ WBK maintains an extensive ATM network and has issued 1.1 million ATM cards.

The lending organization, founded in the aftermath of the fall of the Berlin Wall to facilitate the development of former Communist countries, maintained an early focus on Poland. In 1998, the EBRD established an investment facility worth USD 19.8 million managed by the Polish Fund Advisory and Management Company (FAMCO). Between 1991 and 1998, 10 percent of the EBRD´s financial commitments were in Poland. A full list of EBRD projects, including energy and environmental projects, in Poland can be found here. According to the MIX Market, the EBRD allocated USD 651.2 million of fund assets to microfinance investments as of December 2006 in addition to USD 253.75 million invested in microfinance that were not yet disbursed. Products of the EBRD for small and medium enterprises include debt from USD 27 to USD 270,000, equity, technical assistance including staff training, and integrating SME services into mainstream financial operations.

The EBRD, founded in 1991 and headquartered in London, chiefly promotes microfinance through its Micro, Small and Medium Business Program. Currently working in 30 Central European and Central Asian countries, the EBRD has dedicated USD 1 billion to microfinance in the past two years. In total, EBRD has facilitated USD 22.7 billion in loans to SMEs in 19 countries. MicroCapital has recently reported EBRD´s USD 10 million loan to the Russian SKB Bank in support of SMEs in the Ural mountains in addition to an overview of EBRD´s investments over the past two years.

Poland became a member of the European Union in 2004. According to the CIA World Factbook, Poland´s estimated GDP in terms of purchasing power parity in 2008 was USD 667.4 billion. That year, GDP had grown 4.8 percent, representing a fall from the 6.7 percent growth rate in 2007, also the GDP per capita grew to USD 17,300. 64.7 percent of GDP was derived from the services industry while 53.4 percent of the labor force was employed in services. The unemployment rate in 2008 was 9.7 percent.

Additional Resources:

BZ WBK: Home

BZ WBK Finance & Leasing: Home

BZ WBK Leasing: Home

EBRD: Home

EBRD: Micro, Small, and Medium Business Program

EBRD: Leasing

EBRD: Poland Projects

“EBRD supports Polish leasing sector”, Published by EBRD, May 2009

“EBRD extends further equity capital to Polish SMEs”, Published by EBRD, April 1998

CIA World Factbook: Poland

The European Bank for Reconstruction and Development (EBRD) Provides $3.8m Loan to Inicjatywa Mikro with Technical Assistance Funded by the European Commission (EC) to Support the Development of Micro and Small Enterprises in Poland”, by Yanni Hao, Published by MicroCapital, February 2009

European Development Finance Institutions Part 1: European Bank for Reconstruction and Development (EBRD) Invests Over USD 1 Billion in Microfinance Initiatives Since 2007, by Jaclyn Berfond, Published by MicroCapital, May 2009

The European Bank for Reconstruction and Development (EBRD) to Lend Up to $10m to Russia’s SKB Bank to Provide Loans for Small and Medium-sized Enterprises (SMEs) in the Urals, by Zoran Stanisljevic, Published by MicroCapital, June 2009

By Goda Thangada, Research Assistant

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