The Experience of Public-private Partnerships in Financing Entrepreneurship in Eastern Germany and Poland

Abstract

Public-private partnerships (PPPs) bringing together local authorities, the financial sector and non-profit organisations to optimise financing schemes are efficient ways to foster entrepreneurship locally. PPPs provide support mechanisms that are simple, easily accessible by small businesses and tailored to their needs. For the public sector, the partnership with the private sector thus achieves high leverage. It also allows limited public funds to be used more efficiently, essentially matching microlending for entrepreneurs, mainstream SMEs and entrepreneurial growth companies with guarantees. The public sector further contributes through improving the legal framework to facilitate fundraising and lending by micro credit institutions. However, PPP is a governance tool that requires strong local leadership from the public sector, which should be seen as a facilitator and catalyst.