The main objective is to increase access to finance (loans, microloans) and the level of entrepreneurship in the area of Sandomierz.
Loan Fund Recapitalization of the Centre for Business Promotion and Entrepreneurship in Sandomierz.
In 2011, the initiative was implemented in the eastern region of Poland, Świętokrzyskie Voivodeship as a cooperation between the Marshal Office (regional government) and the Centre for Business Promotion and Entrepreneurship. This partnership recapitalized the Centre’s loan fund thanks to the creation of a pilot scheme co-financed from Poland’s ESF Human Capital Operational Programme during the 2007-2013 programming period.
Under this partnership framework, the recapitalization of the fund allowed the Centre for Business Promotion and Entrepreneurship to create opportunities for entrepreneurs through access to capital (in the form of microloans and larger loans) in the early stages of business development, usually known to be a crucial stage where it’s difficult or even impossible to obtain financing from the mainstream financial sector. Loans could be used to start or continue non-agricultural business activities such as: construction, expansion or modernization of production, service and commerce sites, equipment and manual working tools, including the purchase of vehicles directly related to the purpose of the implemented enterprise, purchase of current assets and intangible assets, acquisition of patents or R&D results. Target beneficiaries are mainly entrepreneurs in the service and trade sector. The target audience is mainly rural and urban population.
Loans granted come with preferential terms: 0% commissions, 6 month grace period and 5 years duration, a min. self-contribution of 20%, an interest rate of 3,16% and the granted capital starts as low as PLN 5,000 (approximately EUR 1,100) and can now go up to PLN 250,000 (approx. 60 000,00 EURO).
Evidence of success
Since the beginning of the fund's activity, the Centre in Sandomierz has provided about 280 loans for more than PLN 17.5 million (approx. EUR 4,130,000), including 110 loans for start-ups. As part of the cooperation with the Marshal's Office, over 160 loans were granted in the amount of PLN 14.5 million (approx. EUR 3,400,000). Thanks to this cooperation, the fund nearly doubled the amount granted in loans. With this financial support, nearly 190 new jobs were created.
Potential for learning or transfer
The successful cooperation shows how ESF co-funded loans and non-financial support can help people with insufficient capital but with ideas and skills to start a new business. This is especially important in areas with a general lack of job opportunities that need to improve the local socio-economic situation. It is also an example of cooperation between national and regional institutions for the implementation of financial instruments as several bodies are involved, with different roles and responsibilities. The managing authority (Ministry of Infrastructure and Development – MID) is ultimately responsible for the operation and implementation of the financial instrument to the regional government (Mazovia Marshall Office), which was appointed as the intermediate body. Thanks to the efficient management of the fund, the capital allocated to the fund using ESF resources is progressively growing, which allows the Center to reach a larger scale and bigger impact at the regional level.
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