BGK to start offering loan guarantees next month

2009-06-12



Bank Gospodarstwa Krajowego (BGK), the state-owned bank, will launch a much-awaited programme of state guarantees for commercial bank loans already as of July, it emerged last week. This contrasts with earlier expectations that the programme could realistically kick off after the summer holidays.
Under the scheme, BGK will provide guarantees of at least PLN 100,000 (€22,400) to underwrite existing and new loans taken out by small and medium-sized enterprises at selected commercial banks. The support will apply to both investment and working-capital loans. However, according to some observers, eligibility criteria for the programme are too tight and will leave out many companies.
Also last week BGK signed an agreement with six commercial banks to provide preferential loans for technology investments to small and medium enterprises (the state-owned bank will use a special pool of EU funds to help repay the loans). More commercial banks are expected to join the scheme.
Reviving commercial lending through state guarantees is at the heart of the government’s strategy for supporting economic growth during the downturn.