EIF and BGK agree 525 billion zloty loan programme for Polish cultural and creative SMEs

The European Investment Fund (EIF) and Bank Gospodarstwa Krajowego (BGK) have signed a counter-guarantee agreement for Polish SMEs, supported by the Cultural and Creative Sectors Guarantee Facility under the EU’s Creative Europe programme.

The counter-guarantee agreement will allow BGK to widen its financing options to Polish SMEs most in need of fresh funding in the cultural and creative sectors, whose business model is hard to evaluate. In particular, BGK’s partner network of banks will support currently underserved sub-sectors including for example design, visual arts, books, music, architecture and cultural activities, with 525 million zloty (around 125 million euros) of loans over three years, backed by the Guarantee Facility. The presence of the counter-guarantee means that the EIF will reimburse BGK in the event that a borrower cannot pay back a loan.

In total, almost 3,000 SMEs in the cultural and creative sectors are expected to obtain access to finance as a result of this new agreement which was made possible thanks to the strong cooperation between EIF and BGK and with the support of the European Fund for Strategic Investments (EFSI), the central pillar of the Investment Plan for Europe, the Juncker Plan.

EIF Deputy Chief Executive, Roger Havenith, said: “The new pilot supported by the EU counter-guarantee incentivises Polish intermediary banks to significantly increase their lending volumes to SMEs active in the cultural and creative sectors. Access to finance is often limited for companies in the cultural and creative sectors, and these new agreements will help BGK to target new support for this sector. The Cultural and Creative sectors in Poland and across Europe will benefit from this EU-backed support.”

Beata Daszyńska-Muzyczka, President of the Management Board of BGK said: “The mission of BGK is to support the development of Polish companies. The new guarantee instrument is part of the implementation of the Strategy for Responsible Development. We will enable SMEs of the creative and the cultural sectors access the external funding. We estimate that approximately 3,000 Polish companies will benefit from guarantees in the first three years. The Creative Europe Programme offers a genuine opportunity for the development of an industry which employs 300 000 people in Poland. The agreement signed today is another example of successful cooperation between BGK and EIF. Together with the banking sector, we create an effective system of entrepreneurship support with the use of EU financial instruments.”

The creative and cultural sectors represent more than seven million jobs in the EU and account for 4.2 per cent of the EU’s GDP. Access to finance can be difficult to obtain for companies active within these sectors, primarily due to the intangible nature of their assets and collateral, the limited size of the market, uncertainty about demand, and also lack of financial intermediary expertise in addressing sector specifics.