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Fresh support for Polish municipalities and SMEs
Loans by EBRD and CEB to strengthen medium-sized bank BISE
Polish municipalities and small and medium-size enterprises (SMEs) will benefit from a PLN40 million (€8.9 million) subordinated loan from the EBRD to Bank Inicjatyw Spoleczno-Ekonomicznych S.A. (BISE), one of the country’s biggest lenders to the municipal sector. In addition, the Council of Europe Development Bank (CEB) will extend BISE a second €30 million loan to co-finance investment projects aimed at job creation and preservation in SMEs, private investment projects in the health, education and environmental protection sectors, and other local investment projects.
By strengthening BISE's capital base, the loan should contribute to the consolidation of the highly fragmented Polish banking sector, said Hanna Gronkiewicz-Waltz, EBRD Vice President. Smaller banks, such as BISE, with a strong local network and a focus on small and medium-sized municipalities as well as SMEs, are proving especially well suited to penetrate niche markets. Both segments are also strategically important to the EBRD, she said.
Krzysztof Ners, Vice-Governor at the CEB, said he was particularly pleased that his bank is providing a second loan to BISE. “The previous CEB loan worth PLN120 million has been entirely disbursed, and BISE proved to be a valuable partner serving as an intermediary bank,” he said. “The CEB believes that tenors of the loans of up to 15 years will enhance BISE's capability to support projects financed by EU grant programmes.” He also underlined the importance the CEB attributes to the cooperation with the EBRD in the financing of SME and municipal programmes.
Wlodzimierz Grudzinski, President of the BISE Management Board, added that he was very satisfied that after the latest subscription of shares by Credit Cooperatif, BISE is now strengthening its capital base thanks to the EBRD. “By increasing its assets, BISE will be able to intensify its banking activities,” he said. “The first CEB loan was disbursed and its proceeds were applied to finance more than 100 municipal projects. The second loan may also help such municipalities to better benefit from EU funds. In addition, it will help BISE in providing top-quality financial assistance with a view to fostering entrepreneurship and local initiatives, and to improve the welfare of its clients.”
BISE, one of the first commercial banks in Poland, was set up in 1990 as a joint venture of Agencja Rozwoju Przemyslu S.A., the state-owned industry development agency, and the French cooperative bank Credit Cooperatif. BISE merged with Bank Energetyki in 1999 and Cukrobank in 2002 and today has 42 branches in the largest Polish cities, in south-eastern and south-western Poland. The Bank has a strong regional focus and since its establishment it has lent to a third of Poland’s municipalities.
The EBRD has invested some €3 billion in Poland since its establishment in 1991. Since 1998, the CEB has approved more than €600 million worth of projects in Poland, in the areas of social housing, aid to victims of floods, job creation and preservation of SMEs, and environment protection.
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