Guarantee Funds

in Polandby

Tomasz Bąkowski, PhDPresident

National Association of Guarantee Funds

Warszawa, 2012

General information about Poland:

Population: 38.116.000Economically active persons: 17.660.000SMEs: 1.800.000 Area: 312.685 km2

GDP: - total: 312.639 billion euro

- per capita: 8.202 euro

GDP Total SMEs +

Big

-Micro -Small -Medium -Big0

50000

100000

150000

200000

250000

300000

350000Polish Gross Domestic Product.

GDP

Total SMEs in GDP = 47%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20110

200000000

400000000

600000000

800000000

1000000000

1200000000

1400000000

Total Assets of Guarantee Funds in Poland.

2004 2005 2006 2007 2008 2009 2010 20110

200,000,000

400,000,000

600,000,000

800,000,000

1,000,000,000

1,200,000,000

Value of guarantees provided in the years 2004 to 2011.

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20110

1000

2000

3000

4000

5000

6000

7000

8000

Number of guarantees provided in the years 2000 to 2011.

Short-term bank loans

Long-term bank loans

Long-term fund loans

Short-term funds loans

other0

100,000,000

200,000,000

300,000,000

400,000,000

500,000,000

600,000,000

Value of guarantees by types of loans.

Short-term bank loans

Long-term bank loans

Long-term fund loans

Short-term funds loans

other0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

Number of guarantees by types of loans.

Short term (<12 M)

Long term (<60 M)

General purpose of guarantee in SMEs.

Short-term bank loans

Long-term bank loans

Long-term fund loans

Short-term funds loans

other0%

10%

20%

30%

40%

50%

60%

70%

80%

75.3%

19.3%

3.2% 1.2% 1.1%

75.2%

13.8% 5.5%2.7% 2.7%

Total value Quantity

The share of the guarantee by types of loans.

Production Services and Transport

Trade Constructions Other0

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

300,000,000

The structure guarantees depending on the sector of the economy.

Production Services and Transport

Trade Constructions Other0%

5%

10%

15%

20%

25%

30%

35%

40%

16.1%

35.0%

31.6%

12.9%

4.3%

12.5%

39.8%

32.0%

11.9%

3.9%

Total value

Quantity

The share of the guarantee by the sector of the economy.

Aggregate amount of collateral with the division on bail in each range of values .

> 50 thousand

50 <x> 100 thousand

100 <x> 250 thousand

250 < x > 500 thousand

x > 500 thousand

0 50,000,000 100,000,000 150,000,000 200,000,000 250,000,000 300,000,000 350,000,000

The structure of guarantees due to the number of contracts in each range of values guarantees.

> 50 thousand

50 <x> 100 thousand

100 <x> 250 thousand

250 < x > 500 thousand

x > 500 thousand

0 200 400 600 800 1000 1200 1400 1600 1800 2000

Banks Loan Funds Other

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

89.90%

5.80%4.30%

96.00%

3.10%0.80%

Number Value

Guarantees by financial institutions.

Distribution of guarantees for SMEs.

Micro-Small

Medium

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%value

amount

The assets of all guarantee funds in Poland are 242 million euros.

In 2011 all guarantee funds awarded of 6.118 guarantees for the amount 226 million euros.

Since 2000 year all guarantee funds granted 44.326 guarantee for an amount of 1,23 billion euros.

Summary

1) The funds provide guarantees of micro, small and medium enterprises (definition of the European Commission), doing business and having its registered office in Poland. In the case of funds that have been supported by the RPO (operational programs in the Regions) or the JEREMIE program, guarantee are available for enterprise who operating in the province.

2) Lack of ability to repay the debt and the restructuring of the company within the meaning of the Community guidelines on State aid for rescuing and restructuring firms (firms in difficulty) excludes the possibility of sponsoring.

3) The funds provide guarantees for companies classified in the category of investment. The adoption of the so-called safe rates according to the Commission Notice on the application of art. 87 and 88 EC Treaty to State aid in the form of guarantees (OJ. C 155/02 of 06.20.2008 issued) and the European Commission Communication on the revision of the method for setting reference and discount rates (OJ. C 14 of 19.1. 2008).

4) Surety shall not be granted to entrepreneurs, who was responsible for the return obtained by the earlier state aid resulting from the European Commission's decision declaring the aid incompatible with the law or with the common market.

The general principles:

5) Guaranteed loans to finance economic activities, provided by banks with whom the fund has entered into a cooperation agreement.

6) Guarantees associated with loans are intended for purposes directly related to economic activity. The programs funded by the RPO and JEREMIE are excluded or severely limited funding for current operations (loans and working capital loans).

7) The maximum value of the guarantee may not exceed 5% of the equity fund.8) Total liabilities of the Fund in respect of guarantees given to one business may not

exceed 5% of its capital.9) The guarantee may be granted up to the max. 80% of the principal amount of the

loan and the value of the guarantee for its duration may not exceed 80% of the current commitments under the credit contract.

10) The funds provide a guarantee for a period of 60 months (regardless of the credit period).

11) Liability Fund on account of guarantee does not include interest, commissions, fees, charges or costs of the investigation by the funding institution.

12) The funds generally accept the grace period for liability incurred.

Supporting the development of the system of credit guarantees;

Dissemination of knowledge and exchange of experience in the field of loan guaranty business;

Cooperation with governmental bodies, local self-government, financial and others carrying out similar objectives for the development of systems of credit guarantees;

The main objectives of the activity of guarantee funds:

The effects of the financial crisis.

The increase in risk aversion in financial markets.

A significant tightening of lending policies of financial institutions.

The worsening economic entities of SMEs.

The role of guarantees.Incentive for banks and other institutions for

debt financing the SME sector,

Risk sharing affects the reduction of reserves by banks,

Increasing the liquidity of the banking sector in case of loss,

Increasing the propensity of banks to undertake the restructuring of SMEs rather

than an accelerated recovery,

Increased capacity (debt) to the incurring of liabilities by SMEs.

Guarantee Funds as market maker.

Banks

Guaranty

Funds

SME’s

Procedure of loan guarantees.SME’s

application of loans and guarantee

Banks – decision with

conditions

Guarantee Funds accept

loans guarantee

Banks sign a loan contract

Steps of procedure.

checking •Checking the completeness of the application form.•Enter data into computer system.

Analisys •Computing Rating analysis.•Expert Analysis.

Decision •Decision of guarantee fund.•Information to SME via bank.

Steps procedures in BanksCollecting of documents

Preparation of loan agreement

Acceptance of credit protection

Conclusion of loan agreement

Monitoring SME’s by Banks.

Quarterly Report to guarantee fund

SME ..n

SME 2SME 1

Default!

Default by guarantee funds point of view. Report from monitoring

Information about default of SME.

Request for payment

Payment for Bank

Vindication SME by guarantee fund

National Association of Guarantee Funds

Adress:Chałubińskiego 3A lok. 1702-004 Warszawa, Polandwww. ksfp.org.plE-mail: ksfp@ksfp.org.pl