Activity of Regional Microfinance Institutions in Terms of Regional Development
Purpose: The aim of the article is to analyse the activity of two types of microfinance institutions in Poland, loan funds and loan guarantee funds and to indicate the relations between their activity and the condition of the regions. Design/Methodology/Approach: To analyse funds activity we have employed a methodological approach of comparative analysis based on data from Eurostat, Local Data Bank, European Microfinanse Network, Polish Association of Loan Funds and Polish Association of Guarantee Funds. Data used in the study included 2012- 2018 years. In order to evaluate the impact of the funds on the region’s development, the study applied Pearson's correlation analysis, linear regression analysis, and single-factor variance analysis. Findings: The results indicate that the collective analysis of operations run by both types of institutions has shown numerous negative correlations, whereas the analysis of the impacts of the funds in the individual voivodeships has shown positive outcomes. It can therefore be stated that the activity of loan funds and guarantee funds on the regional scale displays positive effects and relationships, which differ depending on the region. Practical Implications: Both funds and their owners have to search for new solutions and ways of development. This regards especially the guarantee funds which must compete with national guarantee programmes, which decreases their role from the point of view of commercial banks. Originality/Value: The research study is an original analysis of the impact of regional financial institutions on regional development. It indicated a need for the institutions to change their strategies. In order to increase their impact on the region, the owners (which are mainly self-governmental bodies) should consider recapitalisation while retaining their regional character.