Handlowy-Heller SA

Ryszard LublińskiMember of the Management BoardCommercial Directorwww.heller.pl

Warsaw, October 23–24, 2003

Poland success story

Agenda

What influenced development of factoring 1990-2002

Development of SME in Poland

Factoring market in Poland – current situation

Trends and scenarios for future-

how factoring will develop

•Creation of market economy

What happened in Poland since 1990

Source: PARP

No. of active businesses in Poland 1990-2002

0

200000

400000

600000

800000

1000000

1200000

1400000

1600000

1800000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

•GDP growth rate – @ 4,5% over last 10 years

What happened in Poland since 1990

Gross Domestic Product

0,0

50,0

100,0

150,0

200,01

99

5

19

96

19

97

19

98

19

99

20

00

20

01

20

02

Source: CSO

•Inflation rate – down from 60% to 2% in last 11 years

What happened in Poland since 1990

Inflation in Poland1991-2002

0

10

20

30

40

50

60

70

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

Source: CSO

•Creation of the financial system• Stock Exchange• Internal and external convertibility of the

currency• financial market• banking system

What happened in Poland since 1990

Source:The Banking industry in the emerging market economies, BIS 2001

0

10

20

30

40

50

60

70

80

Slow

enia

Polan

d

Brasil

Chile

Korea

Chin

a

Indi

a

Russia

The size of the foreign investments in the banking sector (%) 2001

Source:CETO

Financial Market in Poland -2002

Consumer savings in the banking system: @ 44 billion EURO

Commercial deposits in the banking system: @ 16,5 billion EURO

Insurance companies: @ 8 billion EURO

Investment funds:@3,5 billion EURO

Pension funds: 6,5 billion EURO

Banks investments in securities: 23,5 billion EURO

TOTAL: @101 billion EURO

Source: PKPE

Structure of businesses in Poland (in terms of # of businesses)

6,29%

29,03%

64,68%

Small enterprises Medium enterprises Big enterprises

Source: PKPE

SME liquidity problems (2001)

31,4

4,8 4,6

43,8

7,4

2,8

0

5

10

15

20

25

30

35

40

45

50

1Tax payments (VAT) Supermarkets chains International corporations

Public sector Other Clients No problems with liquidity

Source: PKPE

Sources of financing the growth for SME

82,0

18,212,5 9,1 8,8

5,0 6,82,0 2,9

0

10

20

30

40

50

60

70

80

90

100

Own funds Regular credit line

Preferential credit line Leasing

Loans from family/ friends Trade credit (payables)

Credit guarantee and EU funds Factoring (estimation)

Other sources

Source: H-H

Factoring in Poland – % of GDP

Country Volume % GDP

Italy 125 bln EUR10,27%UK 140 bln EUR 9,98%France 68 bln EUR 4,46%Spain 24 bln EUR 3,62%

Poland 3,3 bln EUR 1,8%

Source: KIF

0

2

4

6

8

10

12

14

16

bln

zł

1995 1996 1997 1998 1999 2000 2001 2002

Factoring companies Banks (est.) TOTAL

The size of the factoring market in Poland

Factoring in Poland- things to do

1.Bad debt write offs

2.VAT regulations

3.Factoring concept awareness

Factoring in Poland-what next ?

1.Newcomers – growing competition

2.Rapid development of faktoring without recource

3.Cross-selling strategies4.Internet based products

Ryszard LublińskiMember of the Management BoardCommercial Directorwww.heller.pltel. + 22 581 04 00