27 March 2020 – Provided partial guarantees for loans to businesses

Intervention Categories: Finance policy and financial aid; Stimulus packages and financial support
Level of Jurisdiction: National

Overview: The German Government, through the development bank KfW (Kreditanstalt für Wiederaufbau), is providing partial guarantees for loans to businesses.

The policy is intended to improve access to credit to support companies through short-term liquidity problems caused by the COVID-19 crisis.

While credit applications are handled by retail banks, KfW takes on up to 80 percent of credit risk for large companies and up to 90 percent of credit risks for small companies. In addition, interest rates were further reduced and application processes simplified. For example, there is no risk assessment by KfW for all credit applications up to €3 million and only a basic risk assessment for credit applications up to €10 million. All companies that are in financial difficulties due to the COVID-19 crisis are eligible for these credits.

KfW also now participates in syndicated financing for investments and working capital of medium-sized and large enterprises. Here, KfW assumes up to 80 percent of the risk, but no more than 50 percent of the total debt, to increase chances of obtaining individually structured and tailor-made syndicated financing.
Full details here: https://www.bmwi.de/Redaktion/DE/Dossier/coronavirus.html