KfW Bankengruppe, a Germany-based bank, is offering global loans to banks to refinance corporate loans in Germany. Reportedly, the banks are expected to have an opportunity to refinance flexible and customised loans for small and medium-sized enterprises with an annual turnover of up to E500 million as well as for large companies with a higher annual turnover.
KfW has stated that the global loans form part of a package of measures introduced by the German Government slated to run until the end of 2010 and will be drawn from the E40 billion budget of the KfW special programme for corporate Loans. Kfw has added that it has already signed letters of intent with several banks for global loans with a total volume of almost E3.5 billion.
The bank has further added that the lending modalities and the promotional criteria will be agreed on between the interested banks and KfW on the basis of the KfW special programme, within the scope of framework agreements.
Ulrich Schroder, chairman of the managing board of KfW Bankengruppe, said: “Due to the financial crisis the refinancing of medium-and long-term corporate loans is still a major problem for the banks, and is one of the main reasons for the difficult situation in the corporate credit market. We are counteracting this with the global loans, and helping ensure that the green shoots of economic recovery emerging in Germany are not stifled by financing problems.”
