Status: 06/28/2021 4:07 p.m.
The zero interest rate policy of the European Central Bank makes it possible: private customers, start-ups and small entrepreneurs can count on lower interest rates for promotional loans from KfW from July onwards.
Promotional loans from the Kreditanstalt für Wiederaufbau (KfW) are becoming significantly cheaper. From July onwards, the state development bank will pass the favorable interest rates on the capital market on to the commercial banks from which customers apply for loans from the KfW development programs. The interest rate for the final borrower will fall significantly, but remain in the positive range, announced the KfW.
The state-owned banking group practically earns money by refinancing its promotional business on the capital market in the current low interest rate environment. For refinancing, the development bank issues bonds on the international capital markets and, because of the ECB’s zero interest rate policy and Germany’s good credit rating, either does not have to pay any interest at all or even receives money for it. KfW had already announced that it would pass on this advantage. For this, however, the IT systems at the state bank as well as at savings banks, Volks- and Raiffeisenbanken, private banks and state development institutes had to be adapted.
IT project was delayed
Because of the state corona aid, which was also given by KfW, the IT project was delayed by almost a year. In order to still be able to offer customers more favorable conditions, KfW had instead made use of “repayment subsidies” with which it exempted borrowers from part of the repayment.
Because of the margins collected by the customers’ house banks, negative interest rates on promotional loans, for example for climate protection projects or digitization, are not foreseeable, said a KfW spokesman. KfW boss Günther Bräunig spoke of another milestone in the cooperation with the financing partners after the KfW Corona aid. Passing on the negative interest increases the attractiveness of KfW development loans and enables differentiated interest rates.