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BGK and Belarusbank signed an agreement to facilitate the financing of Polish exports to Belarus

17-04-2019

Bank Gospodarstwa Krajowego signed a framework agreement with Belarusian Belarusbank for granting loans to the buyer’s bank on the Belarusian market. The agreement will considerably simplify lending procedures and facilitate the financing of Polish exports to Belarus.

The agreement is a set of general provisions that are common to all future loan agreements and contains a template of an individual agreement signed to finance a specific transaction. As a result of the framework agreement, a loan agreement of new transaction financing, which is dozens of pages long, is shortened to a two-three page individual agreement, the financial terms of which are agreed upon each time. BGK will continue to grant loans from the “Financial Support for Exports” Governmental Programme, with KUKE insurance.

Photo: Bank Gospodarstwa Krajowego

BGK has been co-operating with Belarusbank in the area of trade finance products since 2008. To date, the main problem has been the lengthy process of negotiating the loan agreement, so creating a framework agreement, with a short specimen of an individual agreement, is a big step forward, said Wojciech Hann, Member of the Management Board of BGK.

Until now, the loan for the buyer’s bank has been attractive to exporters of Polish investment goods or services, who concluded multi-million export contracts with foreign counterparties where such contracts required long-term financing. We believe that with the framework agreement, this product will also meet the needs of Belarusian buyers who need financing for amounts ranging from several hundred thousand to several million euros, with a loan maturity of 2-3 years, added the Vice-President.

The agreement concerns loans for the buyer’s bank for financing of investment exports, with a minimum maturity of 2 years. At the same time, the BGK’s portfolio includes a short-term financing product (up to 2 years), also intended for financing of exports of consumer goods.

The use of a framework agreement in co-operation with our joint Belarusian partner is primarily a major facilitation for the Polish business, i.e. an opportunity to accelerate economic exchange with a major Polish neighbour. From the KUKE’s perspective, it is also a faster, easier and less resource-engaging process of providing insurance cover for investment loans, and consequently a decision made for the customer and counterparty in a significantly shorter time, said Janusz Władyczak, CEO of KUKE.

For a long time we have been saying that we perceive the Belarusian market in a very positive way. It is described by the low claims ratio and a disciplined payment system, which is why we encourage other domestic companies to use its potential more actively, obviously with the help of our guarantees and insurance, added Janusz Władyczak.

Belarusian buyers are the largest group of importers who use the “Financial Support for Exports” Governmental Programme, both in terms of the value of financing (over PLN 2.0 bn since the beginning of 2010) and the number of loans granted (nearly 1,700 loans granted and nearly 700 letters of credit financed or confirmed).