Microfinance in Post Communist Countries: The Case of Poland
This paper investigates the structure and performance of the microfinance industry in transition countries of Central and Eastern Europe, the New Independent States and Poland.
The paper discusses the impact of reform processes implemented by governments in transition countries to switch from a centrally-planned to a modern market-driven system. It discusses:
- Changes in the labor-market and emergence of unemployment;
- Government attempts to balance negative effects of transformation through social allowances;
- Efforts to privatize state-owned enterprises;
- Role of small and medium enterprises (SMEs) in the development of the Polish economy;
- Microfinance's role in financing emerging SMEs.
Microfinance can play a significant role in building a new social and economical environment by instilling confidence and trust in the creative and entrepreneurial skills of people in transition countries. MFIs in Poland are solving many problems, including those of unemployment. Microfinance in transition countries has high demand, but also faces difficulties in simultaneously meeting outreach and sustainability goals.
