The regional development funds currently operating could turn into regional banks. It cannot be ruled out that two or three such institutions will be established by the end of the current EU financial perspective, Deputy Development Minister Jerzy Kwieciński told the Polish Press Agency.
“I think that in this EU perspective, but having in mind the spending period, i.e. a time until 2023, two or three regions are good candidates to set up this type of institution” – Kwieciński told PAP when asked when regional development funds could launch regional banks.
“We assume that regional funds can be a platform for creating regional banks” – he added.
The Deputy Minister said that strong institutions were key to the success of the development policy.
“We’re currently building institutions at the national level and the Polish Development Fund (PDF) is a typical example of this. We’re very strongly encouraging our regions to also create financial institutions at the regional level. The counterparts or partners for the PDF at the regional level could be the regional Polish development funds” – explained Kwieciński.
“Our initiative has met with a positive response from the regions, as five of them have already set up such regional development funds. (…) What makes us happy is the fact that the regions are becoming warm to the idea of financial instruments, to repayable instruments” – he added.
The Deputy Minister said that the capital for establishing these institutions is now largely coming from EU funds, i.e. the funds funnelled to support entrepreneurship or the development of local governments at the regional level in the shape of repayable instruments.
Kwieciński said that capital allocated through repayable instruments can be used repeatedly.
“The currently introduced amendment to the implementation act allows voivodships’ self-governments to have a right, guaranteed by the law, to create such institutions. The provisions of this act also ensure that the funds can be allocated to these financial instruments to be used similarly in subsequent financial perspectives, as opposed to, for example, being allocated for a single use, either by the national budget or the regional budget” – the Deputy Minister explained.
Kwieciński said that the ministry assumes that in some time, but in several years rather than a year, some of the institutions will mature enough to be able to create banking institutions using the platforms they have, that is, with regional development funds as starting points.
“Banking institutions are important in that they’re much stronger. They have, of course, greater requirements as banking institutions, but they will also be able to reach for capital from outside, which is a key factor for us, as it means building the financial strength of the institution, in this case at the regional level” – Kwieciński said.
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