Decentralisation is one of the long-term objectives of the restructuring of the public finance sector currently under way. The process is multi-faceted and imposes essential changes on the mode of operation of many financial institutions, including banks. Not only do expectations directed at banks by local government units change: banks are becoming increasingly interested in this market segment.

In order to develop an effective strategy of cooperation with the gminas, banks have to recognise these expectations. This can be achieved, among other methods, through market research - such as conducted by the Foundation for Education and Banking Research - as well as monitoring the trends in the local government finance at the gmina level. The emerging picture is one of a dynamic and heterogenous environment with its own specific characteristics. Amongst many conclusions following from the analysis of market research and the observation of changes in the gmina finance three command most attention:

• local government debt - including debt to banks - is rising fast, while there is an increasing differentiation in the financial situation of various local government bodies;
• if investment plans declared by the gminas are implemented, we will witness a new powerful factor affecting investment demand;
• the local government market segment will be targeted by an increasing number of competing banks; the competition will mainly take place between cooperative and commercial banks.

The research rendered findings vast enough to allow for many conclusions besides the ones listed above. They should be considered carefully, especially by the banks that target the gminas on their path to market success.