MUNICIPAL BONDS AS A TOOL OF FINANCING THE LOCAL GOVERNMENTS’ INVESTMENTS IN RURAL AREAS IN POLAND

The aim of the paper is the evaluation of the role of municipal bonds in financing the local governments’ investments at rural areas in Poland. The paper presents some theoretical background of municipal bonds and provides the analyses of empirical data. The investigation showed that the municipal bond market in Poland developed very quickly, especially in 2009 and 2010. The non-public character of bond issues, small value of an average bond issue and the significant role of banks as organiser agents and investors are the characteristic features of this market. During 2005–2009 local governments in rural areas in Poland used the issues of bonds as a source of financing the investments but the role of this instrument was very small, whereas in the other kinds of local governments the revenues from bond issues played much higher role. However, the high dynamics of issued values is a positive signal for the future. It seems that the tighter cooperation between rural gminas in the area of infrastructural investments and common issuing of municipal bonds would help to obtain the advantages of this way of getting of capital.