Development of social economy enterprises

BGK supports, through financial instruments, the sector of social economy enterprises (SEEs). Social economy is understood as an area of active citizenship and social commitment, which through economic and public benefit activity supports: social integration, creation of jobs, provision of public benefit services, and local development.

Social economy also includes solidarity economy, which is understood as promoting professional activation, including the professional reintegration of people at risk of exclusion, as well as social and professional rehabilitation of persons with disabilities.

According to the “Survey of financial and non-financial needs in the social economy and social and health services sector” of 9 April 2020, carried out by an expert team at the request of the Ministry of Funds and Regional Policy, whose goal was to estimate the financing gap affecting SEEs and limiting their development, due to the unavailability of debt financing sources in 2019 SEEs failed to make planned expenditures totalling approximately PLN 72 million.

Financial support for SEEs is a part of BGK’s mission, which includes activities promoting sustainable socio-economic development of the country. The social economy development programme, which has been pursued by BGK continuously since 2012, is intended to increase the number of social enterprises using
repayable financial instruments. By providing them with access to sources of funding, we facilitate the economisation of these entities, making them independent from the subsidy system. By providing them with funds for their day-to-day operations and development, we help them achieve their objectives laid down in their charters, which consist in measures aimed at resolving social problems and the provision of services to the local communities, including social services.

BGK makes it possible to finance SEEs operations from the European Social Fund as part of the project implemented under Measure 2.9 of the Operational Programme Knowledge, Education, Development (OP KED) for 2014–2020.

PLN million
allocation for repayable instruments from OP KES
total number of loan agreements with SEEs by the end of 2020
PLN milllion
total value of loans advanced to SEEs by the end of 2020
number of jobs declared to be created in SEEs as a result of using the loan

16.65% of borrowers used the loan for a start (for SEEs operating for no more than 12 months), and 83.35% used the loan for development (for SEEs operating longer than 12 months).

Among the borrowers, the largest group consisted of entities from the category of micro-enterprises – 61.73%, followed by small-sized enterprises – 32.02% and medium-sized enterprises – 6.01%. The smallest group among SEEs that used the loans included entities created by churches and religious associations – 0.24%.

Outcomes of the loan taken out as part of Measure 2.9 of OP KES, according to a survey of 9 April 2020.

We expanded our business 63%
There has been an improvement in the quality of our products / services 59%
New jobs were created 47%
New jobs were created for people at risk of poverty and social exclusion 32%
We have undertaken new or increased activities for the benefit of the local community 30%
We expanded our activities in the field of social services 26%
The scope of cooperation with other entities in the field of achieving social goals has increased 22%
The competences and qualifications of employees have increased 20%
New jobs were created for people with disabilities 17%
There has been an increase in wages 14%
We increased the involvement of local entities in the supply chain 12%
Other 2%
I don’t know / hard to say 2%
None of the above-mentioned effects have occurred yet 2%

Low interest loans:

Types of development expenses incurred by SEEs using the proceeds from the loan under OP KES, according to a survey of 9 April 2020.

Type of development expense SEEs using loans under OP KES
Purchase of machinery, apparatus or equipment 52.8%
Training 19.9%
Adaptation and refurbishment of buildings/premises 37.5%
Purchase of merchandise and production materials/materials for the provision of services 23.9%
Marketing activities 15.3%
Hiring new employees 21.0%
Introduction of new/improved products/services 21.6%
Purchase of software or technology 13.1%
Purchase of a car and/or other vehicles 18.8%
Repair of machinery/vehicles 4.0%
Consultancy services 4.0%
Purchase of office/premises/land/building 5.7%
Other 1.1%

Examples of support for social economy enterprises:

Loan for social economy enterprises as part of OP KES

Borrower: Spółdzielnia Socjalna P.W. “EMAUS” – Lublin

Financial intermediary: Foundation for Enterprise Development in Suwałki

Amount of the support: PLN 500,000

Spółdzielnia Socjalna P.W. EMAUS (a social cooperative) is an organisation acting for the benefit of social and professional integration of people at risk of social exclusion. Its objective to provide all means of support to people isolated from society, in particular by creating a community seeking self-sufficiency. In Krężnica Jara, a community of life and work has been set up, whose permanent members include men, women and children. One of the fundamental principles of the community life is the economic independence achieved thanks to the work of its members. All persons capable of performing any work participate in the forms of economic activity developed by the community. The cooperative carries out an economic activity involving production and provision of services, thereby taking care of the economic aspect of ensuring the community’s financial independence.

In May 2020, the cooperative took out a loan as part of OP KES in the amount of PLN 500,000.00 for the purchase of property, which will allow the community to grow its business activity. The community has also established the EMAUS Association, which was also a borrower as part of the loan fund set up in the pilot project implemented by BGK under Measure 1.4 of the Operational Programme Human Capital 2007–2013. For its activities, the Association received numerous awards and distinctions, including the title “Social Enterprise of the Year” in a competition co-organised by BGK.

Liquidity loan for social economy enterprises

Borrower: Wielobranżowa Spółdzielnia Socjalna “Arte”

Financial intermediary: Wałbrzych Regional Fund

Amount of the support: PLN 100,000

Wielobranżowa Spółdzielnia Socjalna “Arte” (a cooperative) of Bielawa used a loan in the amount of
PLN 100,000 to ensure its liquidity in the ongoing crisis caused by the COVID-19 epidemic. Also, the cooperative also took out a loan from the fund established as part of BGK’s project implemented under Measure 2.9 of OP KES, as well as loans offered as part of the pilot project of OP HC for 2007–2013.

The mission of the cooperative is to provide help to people with addictions and their families. It pursues social policy objectives, including social assistance programmes for people who are on the margins of social life (homeless, poor, addicted, helpless in life). The main objective pursued by the cooperative since its inception is to provide support to those in need to minimise the effects of social pathology. For its activities, the cooperative received numerous awards and distinctions, including the certificate “Quality Label of Social and Solidarity Economy” in a competition co-organised by BGK.

Certificate: “Quality Label of Social and Solidarity Economy”

Fulfilling its social mission, BGK also provides partnership support to the Ministry of Family and Social Policy in the implementation of the project “System of certification with quality labels for social economy enterprises and local government units”. Its purpose is to create a nationwide certification system for the social economy sector and local government units involved in the establishment and development of social economy enterprises.

The competition for the award of the certificate of the Quality Label of Social and Solidarity Economy is a perfect occasion for social economy enterprises and local government units to present their activities and commitment to social economy. The contest promotes enterprises which are the most successful in combining economic activity with social engagement and local governments which recognise that in the area of their jurisdiction they can solve some social problems by establishing and supporting SEEs. The certificates confirm the high quality of services and products provided by the social economy sector and the contribution of local government units to improving the quality of life of residents.

For many years, the J.K. Steczkowski BGK Foundation has been involved in the development of the social economy sector in Poland. As part of an annual contest organised by the Ministry of Family and Social Policy together with BGK and the Nowy Staw Foundation of Lublin, BGK provides cash awards to top enterprises which received the “Quality Label of Social and Solidarity Economy”.

Examples of winners that received BGK Foundation awards:

Konwalia Social Cooperative in Mochy, which helps people at risk of social exclusion and people of low employability return to the labour market and promotes professional activation of unemployed persons.

MULTISERVICE Social Cooperative in Myszków, which operates a social enterprise whose business consists in property protection, courier services, and rental and operation of active leisure facilities for children.

Serowa Kraina Social Cooperative in Rajcza, which produces and sells traditional natural and smoked cheese.

Tyflologika Foundation of Poznań, whose activities are aimed at social and professional reintegration and integration, in particular of persons at risk of social exclusion.