After World War II, a bank called KfW was created under the Marshall Plan. Its purpose is to help new, small and medium-sized businesses based in Germany, grow and expand. The name KfW comes from the German words Kreditanstalt für Wiederaufbau which means reconstruction credit institute in English. This bank is centered in Frankfurt, Germany and is owned by the German government.
In 2009, the Global Finance publication “World's 50 Safest Banks 2009” and stated that KfW was the safest bank in the world. This conclusion originated from Fitch Ratings and Standard and Poor's information on long-term ratings of foreign currency, along with Moody's Investor Service long-term ratings for bank deposits.
In addition, KfW promoted the most businesses in Germany with 50.9 billion in euros in 2009. This included small to medium-sized organizations, related to the environment, industry, education and housing.
However, regardless of the 2009 financial downturn impact on KfW', its worldwide loan programs attained a volume of 63.9 euros.
KfW Loan Programs
KfW loans are an essential part of KfW Mittelstandsbank key operations. KfW Mittelstandsbank constantly strives to update their financial instruments to work with market changes.
Small to medium-sized enterprises, or known as SME, investment loans are made with 3 key principles in mind:
1. Funds that bring together debt like instruments (bonds) and equity stocks, (also called mezzanine).
2. Capital based on equity.
3. Investment loans.
Here are several examples of KfW loans:
The StartGeld Loan
This loan targets individuals starting businesses, professionals that are self-employed or small companies with businesses under 3 years old, that have operating projects with costs under 50,000 euros. The loan is known as program 061.
KfW offers entrepreneurs loans that provide funds for working capital, worldwide investments and German investments. These are loan programs 037 and 047.
The ERP Innovation
This is a loan with low interest rates that is intended for businesses that produce new ideas or inventions. It's within the loan programs 180 through 185 and 190 to program 195.