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Since taking on the mantle of Poland's development bank three years ago, Bank Gospodarstwa Krajowego (BGK) has wasted little time getting to grips with the country's social and economic challenges. Now new plans to provide more rental housing, help firms expand overseas and fund municipal infrastructure are joining the bank's well established support for the SME sector. Steve Gilmore reports.
Bank Gospodarstwa Krajowego (BGK) has been continuously in existence -- if not always active -- since it was established in May 1924, including during the Second World War, Poland's years under communism and the country's accession to the European Union. Its role as Poland's development bank, however, is a relatively recent one.
It was in late 2012 when then prime minister Donald Tusk announced BGK's new mandate, at which point the bank's balance sheet was a modest Z48.6bn ($13.1bn). That figure had grown to Z51.1bn by 2014, while gross loans had increased by 32% ( see table ).
BGK lends directly to mainly larger companies. To reach small and medium enterprises (SMEs) it uses umbrella facilities, like its de minimis guarantee programme, which encourages commercial banks to lend to mid-size corporates. As of the end of April, Z19bn of BGK guaranteed loans have been issued to SMEs under the de minimis programme. BGK counts 23 banks co-operating with it under the programme, which has helped prompt Z34.2bn of commercial banking lending and reached 84,000 SMEs.
But BGK has also created several new fund-based initiatives, some of which will be conducted through subsidiaries rather than directly by the bank itself, in order to expand into new areas of the Polish economy.
"The bank's ordinary operations are going nicely," says BGK's president Dariusz Kacprzyk. "We've identified a number of gaps that need to be filled, and decided to do more investment activity through funds. The apartments for rent is one example."
Double impact
BGK's Apartments for Rent Fund will, as the name suggests, purchase existing rental apartments or purchase plots and contract construction of new flats out to a developer. The bank is hoping to cater to an influx of people and families moving from smaller towns to the larger cities for new jobs -- although it has no strict criteria in who can rent the apartments.