The Administration of Financial Institutions and the Social Economy (PRAWO i WIĘŹ)

Summary

• Poland has around 100,000 social economy entities operating in its socio-economic landscape.p.4
• Data from Bank Gospodarstwa Krajowego (BGK) shows that 49% of loan beneficiaries are not-for-profit entities, 41% are non-profit organisations, and 11% operate on a for-profit basis.p.7
• A 2019 survey revealed that 42% of social economy entities cited a lack of need for repayable instruments and 42% cited reluctance to take on debt as reasons for not applying for commercial financing.p.9
• Lack of suitable collateral and lack of creditworthiness were each cited by 23% of surveyed entities as barriers to accessing commercial market financing.p.9
• Under Commission Regulation (EU) 2023/2831 applicable from 1 January 2024, the ceiling for de minimis aid granted to a single undertaking is €300,000 over a three-year period.p.13

Key insights

1. The administration of financial institutions influences the social economy both directly through fund distribution and settlement, and indirectly by establishing security and transparency standards.p.3
2. Bank Gospodarstwa Krajowego offers liquidity, mission-based, start-up, and development loans to social economy entities under the European Funds for Social Development 2021–2027.p.7
3. Social economy entities frequently face credit barriers due to commercial banks' limited understanding of their legal forms, operating models, and financial management practices.p.9
4. Complex documentation, extensive reporting obligations, and task-based accounting required for European funds create heavy administrative burdens for social economy entities.p.10
5. Members of governing bodies of non-public entities receiving public funds face personal liability for breaches of public finance discipline under Polish law.p.11
6. Public support granted to social economy entities carrying out economic activities must comply with EU state aid rules under Article 107(1) TFEU.p.12