Deloitte: Poland enters the phase of economic expansion

The divergence of economic moods in Poland...

Two Years On: War in Ukraine and Its Global Impact

On February 24, 2022, a full-scale Russian...

Shifts in Credit Dynamics for Microenterprises in Poland

FINANCEShifts in Credit Dynamics for Microenterprises in Poland

In March 2024, compared to March 2023, banks granted fewer loans to microenterprises, with a 4.5% decrease in number and a 3.3% decrease in value. The reduction in loan numbers was evident across revolving credits (-6.0%), current account credits (-9.3%), and investment credits (-37.4%). However, in terms of value, only investment credits saw a positive annual dynamic, increasing by 9.3%. There was a decline in the value of current account credits (-17.7%) and revolving credits (-4.6%).

In the first quarter of 2024, compared to the same period last year, banks issued more loans to microenterprises, up by 2.0% in number and 2.3% in value. Positive dynamics during this period were only seen in revolving credits, both in terms of number (+2.4%) and value (+2.1%). However, there was a decline in the number of both investment and current account credits issued, though investment credits experienced a 4.4% rise in value. Current account credits, on the other hand, saw a negative value dynamic (-7.1%).

Credit Quality Indices for Microenterprises by Loan Products

The March 2024 BIK Credit Quality Index for microenterprises was 5.46% in terms of value, indicating a relatively safe and acceptable level. The product-specific Quality Indices in March 2024 were as follows: investment credits at 3.93%, current account credits at 4.35%, and revolving credits at 8.42%.

From February to March 2024, the overall Quality Index deteriorated (increased) by +0.30. Over a 12-month period, compared to March 2023, the overall Index improved (decreased) by -0.90. The most significant improvement over the 12-month period was in revolving credits (-2.80), followed by current account credits (-0.71). However, the investment credit Index worsened (increased) by +0.89.

Credit Sales for Microenterprises by Industry

Out of 13,800 loans granted to microenterprises in March 2024, service companies took 6,700 loans (48.6%), and trade companies took 3,100 loans (22.7%), totaling 71.2% of all credits issued that month. Of the total amount of 2.128 billion PLN, banks provided 820 million PLN (38.5%) to service industry microenterprises and 522 million PLN (24.5%) to trade companies. Financing for these two sectors in March 2024 accounted for 63% of the total value of credits issued to microenterprises. The year-over-year positive dynamics in March 2024 for the number of credits issued was in financing services (+0.5%).

In terms of value, the highest positive dynamics in March 2024 compared to March 2023 was in credits for service companies (+7.7%). Smaller increases were recorded in credits issued to manufacturing companies (+3.4%). However, the value of credits granted to trade companies decreased by 15.0% and to construction companies by 10.6%.

Credit Quality Indices for Microenterprises by Industry

According to the Quality Index readings, construction companies had the worst (highest) repayment rate in March 2024, with an Index value of 6.07%. The best (lowest) reading was recorded in the trade sector, with an Index value of 5.14%.

Compared to March 2023, the Quality Index improved (decreased) in three industries, most notably in trade (-1.75) and services (-0.92). It deteriorated (increased) in the construction sector (+0.70).

Check out our other content
Related Articles
The Latest Articles