The European Bank for Reconstruction and Development (EBRD) has provided Bank BGZ, a Polish bank that offers financing primarily to rural entrepreneurs, with a EUR 50 million (USD 63 million) credit line for on-lending to micro-, small and medium-sized enterprises (MSMEs) in rural areas. MSMEs are significant contributors to Poland’s economy. According to a press release from EBRD, they make up “over 55 percent of Poland’s GDP”.
In 2006, the European Union (EU) and EBRD jointly provided a EUR 15 million loan under the EU/EBRD Small and Medium-sized (SME) Finance Facility to Bank BGZ. The bank, through that loan, was able to on-lend to rural MSMEs and farmers an aggregate amount of EUR 42 million (USD 54 million). No information is available on how this leveraging was achieved).
According to the bank’s annual report, as of 2008, Bank BGZ had total assets of PLN 24 billion (USD 7.6 billion), gross loan portfolio of PLN 18 billion (USD 5.6 billion), net profit of PLN 213 million (USD 68 million) and return on equity of 9.8 percent.
By: Christine Chang, Research Associate
About European Bank for Reconstruction and Development (EBRD):
The bank began operations in 1991 upon the agreement of 40 countries and is now owned by 61 countries as well as the European Investment Bank and the European Union. It aims to finance operations that are both commercially viable and assist development in 29 countries in Central Europe and Central Asia. It does this by providing loans, debt securities, equity investments, guarantees and technical assistance to micro and small businesses as well as commercial banks and non-bank microfinance institutions (MFIs). As of the end of 2008, EBRD has operating assets worth EUR 5.2 billion, the equivalent of over USD 7 billion.
About Bank BGZ:
Bank BGZ was established in 1975. The Dutch bank, Rabobank Group, has a 60 percent stake in the bank, and the rest is owned by the Polish State Treasury. Bank BGZ has a network of approximately 300 branches across Poland, and focuses primarily on financing rural entrepreneurs. According to the bank’s annual report, as of 2008, Bank BGZ had total assets of PLN 24 billion (USD 7.6 billion), gross loan portfolio of PLN 18 billion (USD 5.6 billion), net profit of PLN 213 million (USD 68 million) and return on equity of 9.8 percent.
Additional Resources:
EBRD press release: EBRD financing for rural businesses in Poland, May 14, 2010: http://www.ebrd.com/new/pressrel/2010/100514a.htm
MicroCapital Universe: European Bank for Reconstruction and Development (EBRD): https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=European+Bank+for+Reconstruction+and+Development+%28EBRD%29
MicroCapital Universe: Bank BGZ: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Bank+BGZ
Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/
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