KfW Enhances Financing for SMEs Towards Digital Future
KfW is launching a new "KfW Loan for Growth" to support innovation and digitalization projects of larger SMEs. The program includes a risk participation facility in cooperation with the EIB.
Frankfurt, June 6, 2018 – KfW, the German development bank, is expanding its financing offerings to support companies in innovation and digitalization. The new "KfW Loan for Growth" is designed for larger medium-sized enterprises aiming for significant growth through market expansion or business digitalization.
The program provides individually structured, large-volume financing solutions, complementing KfW's existing range of standardized, bank-intermediated promotional products. While previous risk-sharing programs targeted companies with annual turnovers up to EUR 500 million, this new facility allows KfW to assume part of the credit risk for companies with turnovers up to EUR 2 billion. This addresses challenges in financing innovation and digitalization projects, where success is often difficult to predict.
Under the new program, KfW will participate in debt financing operations alongside partner banks, covering up to 70% of the project risk through a sub-participation. KfW secures this credit risk with a 50% guarantee from the European Fund for Strategic Investments (EFSI), part of the Investment Plan for Europe. Risk diversification among multiple partners under the "KfW Loan for Growth" will also facilitate larger loan volumes.
Dr. Ingrid Hengster, Member of KfW's Executive Board, emphasized that larger SMEs are key drivers of digitalization and innovation in Germany. "With the new "KfW Loan for Growth," we are helping to overcome persistent difficulties in financing major innovation and digitalization investments," Hengster stated. EIB Vice-President Ambroise Fayolle noted that the program strengthens the cooperation between the EIB and KfW in the innovation sector.