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150 years of cooperative banking in Poland
The idea of financial self-help had evolved in Poland since the
15th century. In 1577 Rev. Wawrzyniec Białobrzeski set up the
Ostrołęka Cheap Loan Foundation. The 16th century also saw
the formation of religious banks offering interest-free loans out
of a pool of donations of the faithful and guaranteed by forfeits. At a later time charitable organisations made no-interest loans to
peasants whose repayment was jointly and severally secured by
farmers living in the same village.
In Poland typical credit unions began to emerge out of the need to protect interests of small farmers and artisans against competition from the large-scale capitalist industry. Financial selfhelp manifested itself, among other things, in establishing funds without any support from state or public institutions. Non-repayable public aid, except for taking out a refinance loan in emergencies, was believed to thwart economic self-reliance of cooperatives.
In the 19th century, as a result of socio-political changes determined by the policy of colonisation of the partitioning powers, Polish manufactures and farmers were driven out of their farms or deprived of their businesses, and thus impoverished. At the same time, the rules and conditions for managing business activity called for improvements and created a demand for capital. It was the small-scale manufactures who suffered most severely from credit discrimination as in the first part of the nineteenth century they could only take out usurious loans. At that time many attempts were made to organise cooperatives (for instance, the initiative taken by Karol Marcinkiewicz to establish the Polish Bazaar in Poznań or the creation of the Company for Savings and Bill of Exchange Loans in the town of Śrem, from which the tradition of the Rev. Piotr Wawrzyniak Cooperative Bank in Śrem originates). The fact that Polish cooperatives had been evolving relatively long in partitioned Poland – in three provinces with different legal systems and various economic cultures – was of great significance.
In 1861 the Poznań Industrial Society – driven by the need to assist home entrepreneurs discriminated by the partitioning powers – established (the first in Poland) the Loan Society for Industrialists from the city of Poznań. The Society drew on the idea of Hermann Schulze’s credit union. The Polish cooperative movement was launched in the Gdańsk Pomerania when the Loan Society for Industrialists from the town of Brodnica was created in 1862, and in the Upper Silesia when the Lending Society for the Zawadzkie district and its neighbourhood was established in 1869.
The Cooperative Bank in Brodnica – a successor and beneficiary of the Loan Society for Industrialists from the town of Brodnica – was created by local activists who wished to protect home-grown entrepreneurship, as well as the Polish language and culture. The main object of the Society, which was the only Polish credit institution in Brodnica besides six German banks, was to extend loans to craftsmen and industrialists from the pool made up of its members’ contributions. In addition to its banking activity, the Cooperative Bank in Brodnica, like many other similar institutions, promoted the Polish identity and the positivist work in the local community both at the time of the rule of partitioners of Poland and when the country regained independence.
The cooperative movement in general, and credit unions in particular, extensively contributed to the development of the Polish economy in the inter-war period. This movement was an institutional vehicle for preserving the national identity in some regions of the country during the Second Polish Republic. The WWII wreaked havoc on the economic fundamentals and many outstanding cooperative activists did not stay alive to the end of the war in 1945. After the war some attempts were made to reactivate cooperative banking. However, cooperative banks were incorporated into the command-and-quota system of the Polish People’s Republic and as a result they lost their cooperative nature.
After the year 1989 nearly two thirds of almost 1660 cooperative banks failed to meet the requirements of the new economic conditions. Only few overcame the crisis, though there were many that were saved, for instance, by mergers and acquisitions with other banks, which allowed them to retain a widespread network of branches. The Cooperative Bank in Brodnica, alongside the Cooperative Bank in Kraków, was among the leaders in that consolidation process. The bank merged with thirteen other cooperative banks based on the alignment of business criteria or as part of the banks’ rehabilitation process. At present around 570 cooperative banks – affiliated in two banking groups – meet the regulatory requirements applying to credit institutions in Poland. They offer modern financial services through the widest network of branches (almost 4000 outlets).
Prof. dr hab. Jan Szambelańczyk