Małopolska
Development Fund

The Małopolska Development Fund is a newly established specialized company of the Self-Government of the Małopolska voivodship, responsible for the reuse of repayable public funds. Once the regional operational programmes’ funds are settled with the European Commission, the resources returned under loans or guarantees create capital that can be reused with future investments in mind.

The more repayable instruments are implemented using the structural funds, the more funds for further investments will remain in the region, which is the fundamental difference between repayable and subsidy-based funds.

In accordance with the economic development policy of the Małopolska region, this money will still be used to support entrepreneurship or the development of local governments in the shape of debt or equity instruments. Thanks to this, these funds will be used many times and, in the long run, the Fund may give rise to a regional bank.

The Fund operates as a limited liability company, whose sole Shareholder, owning all its shares, is the Małopolskie voivodship. Depending on the type of financial product (e.g. loan, guarantee, or equity and quasi-equity instruments), the Fund may provide support directly or through entities running loan or guarantee funds, i.e. Financial Intermediaries.

In principle, the Fund’s clients are primarily institutions as opposed to entrepreneurs themselves, but micro, small and medium-sized enterprises make up the basic target group for the Fund’s activities.

Currently, the support is financed with funds returning from the market, which in the period 2007-2013 were provided to Małopolska’s SMEs in the form of loans and guarantees and are currently being returned by the beneficiaries. Gradually, the company should raise capital amounting to over 170 million PLN by 2027.

The type and scope of support offered stem from the Investment Strategy defined by the authorities of the Małopolska voivodship. It is important that the products being launched are of a returnable nature. In principle, the financial resources managed by the Fund will be funnelled to areas where, firstly, there is a lack of market capital, and, secondly, they will contribute to financing investments which have the potential of being economically viable or financially feasible.

The activities of an institution such as the MDF also involve risk assessment, a need for appropriate security measures, or an exit path from the investment.