Saturday, 10 May 2025
The microenterprise loan market in Poland faced significant challenges in 2024, with businesses grappling with high interest rates, rising energy costs, and increasing wage levels. By the end of December 2024, the value of the loan portfolio for microenterprises stood at PLN 74 billion, accounting for 14% of the total loan portfolio of enterprises and local governments. Despite a 6.2% increase in investment loans, the overall loan growth for microenterprises declined by 3.8%.
According to the Central Registration and Information on Business (CEIDG), approximately 2.5 million microenterprises were registered in Poland at the end of 2024. These small businesses, primarily operating in construction, services, trade, and production, faced an economic environment marked by inflation and shifts in consumer behavior. With individuals prioritizing savings over spending, lending to small businesses saw a decline. Moreover, Poland’s micro-companies continue to exhibit a low level of indebtedness, with only 17% of active businesses utilizing bank credit.
Microenterprise Loan Market Performance
At the close of 2024, microenterprise loan values reached PLN 74 billion, reflecting a 2.1% year-on-year increase. The debt structure was dominated by working capital loans (33.9%) and overdrafts (25.5%), indicating that nearly 70% of microenterprise debt was used for short-term financing. Investment loans, aimed at business development, accounted for only 23.8% of total debt. Service companies (41.0%) and commercial enterprises (29.4%) led in terms of loan allocation, making up more than 70% of microenterprise debt, followed by manufacturing (14.9%) and construction (13.0%).
Despite a rise in investment loan value, microenterprise lending declined by nearly 4% in 2024. Businesses secured loans worth PLN 22.0 billion, marking a 3.8% contraction. Investment loans grew by 6.2% in value, but the number of loans issued fell by 29.2%. Meanwhile, working capital loans and overdraft facilities saw declines of 9.9% and 8.9%, respectively, compared to 2023.
Sectoral Analysis: Service Sector Leads in Lending
Microenterprise lending patterns varied across industries. The service sector emerged as the top borrower, securing 72,800 new loans totaling PLN 8.5 billion, reflecting a 3% year-on-year increase. Rising electricity and gas prices significantly impacted the profitability of service-oriented businesses such as catering, hospitality, and beauty salons. However, the growing demand for experience-based services and increased income in this sector partially offset these challenges.
Commercial enterprises ranked second, receiving 33,700 loans amounting to PLN 5.72 billion, an 11.8% year-on-year decline. The sluggish retail sector, with sales increasing by just 2.7%, led consumers to cut discretionary spending, reducing the financial activity of micro-entrepreneurs in trade.
Manufacturing firms secured 15,200 loans worth PLN 3.16 billion, marking a 6.3% decline in loan count and a 7.3% drop in value. Rising labor costs, energy prices, supply chain disruptions, and a German economic slowdown posed significant challenges to Polish micro-manufacturers.
The construction industry, after years of high profitability, entered a slowdown in 2024. Loan values in this sector declined by 2.9% year-on-year to PLN 4.21 billion, with only 26,000 loans issued—a 3.7% drop. Workforce availability emerged as a key challenge, with competition for skilled labor driving up costs and pressuring margins.
Loan Repayment Quality and Risks
The quality of microenterprise loan repayments deteriorated, particularly for investment loans. At the end of 2024, 22% of investment loans were overdue by more than 90 days, an increase of 2.9 percentage points from the previous year. Investment loans became the second-most challenging loan type for micro-entrepreneurs to repay, after working capital loans (24.4% delinquency rate).
Conversely, slight improvements in loan repayment quality were observed in commercial, manufacturing, and construction sectors. The BIK Quality Index improved for commercial loans (+0.21), manufacturing loans (+0.32), and construction loans (+0.58), while the service sector experienced a marginal decline (-0.07).
Looking ahead to 2025, the microenterprise lending market remains uncertain, influenced by economic conditions, consumer confidence, and regulatory policies. While certain sectors show resilience, the broader market continues to face challenges in credit availability and repayment sustainability.
Source: BIK
