Cooperative Banks & Local Government Units - Areas of Collaboration (Poland Case Study - Research Results)

Abstract

In 1990 Poland reactivated local governments and several years later the territorial reform introduced two new (apart from communes) local government levels: counties and provinces. This led to the increase in the number of entities running specific activities and therefore needing various banking services. Local governments are attractive clients for banks, because they have at their disposal significant and absolutely credible financial resources. Moreover, local governments have a big developing potential and numerous needs. Apart form that, the number of local government units makes them important clients of banking industry now and in future. The value of the cooperation becomes even more important in the context of Poland's presence in the EU. The aim of the article is to present the scope and character of cooperative banks' collaboration with local government units in Poland, as well as to identify the basic obstacles in this collaboration indicated by various cooperative banks. The author of the article presents the results of the questionnaire survey conducted as for 31/12/2007 among 140 cooperative banks, associated in one of Polish associate banks and serving nearly 600 local government units in Poland. The research results presented in the article concern cooperative banks' policy towards local government units concerning bank account and term deposit services. Moreover, the article describes the level and character of the units' indebtedness in the selected cooperative banks. The conclusion presents the main obstacles of collaboration between cooperative banks and local government units, as well as the banks' relevant expectations from the associate bank. Apart from that, the author attempts to evaluate the collaboration and indicates changes that ought to be introduced in order to make the collaboration more efficient.