In 2024, the Polish private debt market reached a value of PLN 2.5–4.0 billion. Despite its rapid growth, this segment accounts for only 2% of the total volume of corporate loans issued by banks in Poland. Experts at PwC and Strategy& estimate that the market could grow to PLN 16.9 billion over the next six years. Globally, private debt financing is also gaining significance, with projections suggesting it will reach $2.3 trillion by 2027. Currently, 56% of the private debt market is concentrated in two sectors: IT and healthcare, according to the report “The Private Debt Market – An Opportunity for Polish Companies and Banks” by Strategy& in Poland.
What Is Private Debt?
Private debt is an increasingly popular financing option that combines characteristics of debt instruments and alternative capital investments. It involves funding investment projects with non-bank capital, such as funds, non-bank institutions, or private investors. This financing method offers a diverse range of options in terms of risk profile, expected returns, and funding periods, making it an attractive alternative for businesses, investors, and asset managers.
“Banks, despite their significant capital base, face challenges in financing multi-billion-dollar investments related to energy transformation, infrastructure, and defense projects. In this context, embracing new forms of business and project financing, such as private debt, becomes a beneficial solution even for banks. The current private debt market in Poland, estimated at under PLN 4 billion, poses no threat to banks’ profitability or market position. On the contrary, the coexistence of funds and banks could bring significant benefits to Polish entrepreneurs,” said Przemysław Paprotny, Partner at PwC Poland and Head of Financial Services for Central and Eastern Europe.
Growth Potential and Challenges
Between 2013 and 2023, the total volume of corporate and SME loans in Poland grew from PLN 278 billion to PLN 411 billion (+48%). However, credit activity has slowed in recent years due to macroeconomic uncertainty, high inflation, and production costs. Rising interest rates have led to a significant decline in new loans, while the COVID-19 pandemic, the conflict in Ukraine, and increasing energy and labor costs have reduced investment activity and loan demand.
PwC and Strategy& forecasts suggest that in an optimistic scenario, Poland’s private debt market could grow fourfold to nearly PLN 17 billion by 2030. With strong interest from corporate clients, banks could benefit from the market’s development, potentially outweighing any associated risks.
“Ultimately, private debt could become a key element of Polish banks’ financial strategies, supporting the diversification of funding sources and boosting returns on assets,” said Jakob Szucsich, Director at Strategy& in Poland and part of the Financial Services team.
Strategic Partnerships for Banks
Strategic partnerships in private debt can offer banks an effective way to compete with more flexible private debt funds. Banks, constrained by strict capital, reporting, and regulatory requirements, can reduce these barriers by collaborating with partners. Such partnerships provide banks with access to new, more stable funding sources and enable better risk-weighted asset management.
Through these partnerships, banks can:
- Diversify their client base.
- Offer a broader range of credit products.
- Strengthen their market position.
Meanwhile, private debt funds, operating in a less restrictive regulatory environment, maintain an edge in flexibility, allowing them to adapt more quickly to market changes. By partnering with these funds, banks can improve capital efficiency, offload balance sheets, and adopt lighter asset models. This synergy enables banks to better compete in the growing private debt market by leveraging complementary strengths.
Source: CEO.com.pl
