First Business – Start-Up Support

In line with its mission, Bank Gospodarstwa Krajowego supports the activation of the unemployed and people at risk of unemployment and exclusion from the labour market.

The Bank fulfils this objective, among other things, as the operator of the “First Business – Start-Up Support Government Programme”, acting on behalf of the Ministry of Family and Social Policy. Under the programme, loans and advisory and training services are provided by Financial Intermediaries (FI, Intermediaries) operating in individual areas of the country and selected in a public procurement procedure.

The programme, launched in 2013 by the then Ministry of Labour and Social Policy, is one of the systemic instruments for supporting young people and the unemployed in the labour market. Its purpose is to foster entrepreneurship and create new jobs by providing loans for starting new businesses, loans for job creation and by offering free training and advisory services.

Parameters of a loan for starting a business

Amount of support approximately PLN 119,000

(20 times the average monthly salary)

Financing period (maximum) 84 months
Grace period for repayment up to 12 months
Interest rate fixed interest rate for the entire lending period

§  0.53% (1/10 bill of exchange rediscount rate)
per annum for carers of disabled persons

§  1.33% (1/4 bill of exchange rediscount rate) for other persons eligible to receive a loan

Share of support in project cost up to 100% (no own contribution required)
Additional fees no fees and commissions for the provision and servicing the loan

Parameters of a loan for creating a job

Amount of support approximately PLN 35,000

(6 times the average monthly salary)

Financing period (maximum) 36 months, or

until the repayment of the last instalment
of the loan for starting a business

Interest rate fixed interest rate for the entire lending period

§  0.53% (1/10 bill of exchange rediscount rate)
per annum for nurseries and children’s clubs and entities providing rehabilitation services for children with disabilities at home

§  1.33% (1/4 bill of exchange rediscount rate) for other persons eligible to receive a loan

Share of support in project cost up to 100% (no own contribution required)
Additional fees no fees and commissions for the provision and servicing the loan
Security blank promissory note and sureties provided by natural persons

(other security may be provided instead of a surety)

Examples of use of programme funds

 

Borrower: BETCHAR Michał Charczenko, unemployed person

 

Financial Intermediary: Foundation for the Development of Silesia

 

Loan amount: PLN 102,400.00

 

The business consists in the production of prefabricated concrete construction elements, in particular foundation elements (concrete blocks and formwork blocks). The entrepreneur has 18 years of experience in the manufacturing and construction industry.

 

The objective of the activity is to supply concrete elements to nearby wholesalers and construction companies (through wholesale, not retail sale). Thanks to operating own concrete plant, the entrepreneur is not dependent on the production of prefabricated construction elements, because he can also offer ready-mix concrete.

Outlook

In the financial framework for 2021–2027, the programme will be funded from ESF+. EU funds will be used for the implementation of a single loan instrument, i.e. a loan for starting a business. Loans for job creation will continue to be financed from the Labour Fund. It is expected that in 2022 work will be underway to agree with the Ministry of Family and Social Policy and the Ministry of Funds and Regional Development on the rules of the programme and that appropriate arrangements will be made and agreements will be signed to govern its further operation.

Financing sources

By the end of 2021, the Ministry of Family and Social Policy transferred a total of more than PLN 401.2 million to BGK for the implementation of the programme (PLN 21.5 million as part of the pilot project and PLN 379.7 million as part of stage 2). In addition, according to the agreement, proceeds from loans repaid and returned, together with interest, as well as investment/interest income are used to provide further loans, advisory and training services to borrowers and to finance the costs of servicing the loans.

Activities carried out in 2021

Surveys carried out by BGK among beneficiaries show that the “First Business – Start-Up Support Government Programme” contributed to the development of enterprise, enabling many people who had limited access to financing from other sources to take up business activity, who would not have otherwise set up a business. The outcome of the programme is presented in the table below.

  Support provided since programme launch as at 31 December 2021 Support provided in 2021
Number of loans advanced for starting a business 5736 635
Value of loans advanced for starting a business PLN 398,143,744.83 PLN 54,140,025.13
Number of loans advanced for creating a job 135 11
Value of loans advanced for creating a job PLN 3,810,260.79 PLN 709,747.88

Borrower structure in 2021

86
%
unemployed
60
%
persons over 30
56,5
%
men
67
%
borrowers who started a business in the service or trade sector

The EFS Programme

As a supplementation of the “First Business – Start-Up Support” programme, the ESF Programme was launched. Its final beneficiaries are different depending on the region, e.g. in the Province of Łódź it is addressed to persons over 29 years of age who are unemployed, i.e. unemployed, job-seekers or inactive people, who intend to start a business. The programme is implemented by BGK using the funds of Regional Operational Programmes. The Bank has PLN 318.9 million at its disposal for that purpose, which is the total amount allocated for projects under the ESF Programme. The funds are allocated to various sectors of the economy.