An investment program of up to 250 million euros for small and medium-sized companies in Lower Saxony has so far come to fruition. The so-called investment loan from the country’s development bank, NBank, was actually intended to allow long-term investments to be possible and reduce the impact of the war in Ukraine. But shortly before the deadline for bids ended on Wednesday, only four bids with a total amount of 1.05 million euros were approved.
Four bids with a total amount of 5.8 million euros were rejected, as NBank announced by request. Two other applications with a total amount of 4.7 million euros are being prepared for submission.
The NBank admitted that the procedure published in March had a longer start time than expected. Discussions are currently underway regarding a possible extension of the investment loan.
Concepts for climate-friendly investments may not yet exist
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According to NBank, the reason for the problems was that household banks have to meet regulatory requirements to be able to work with the online portal through which they can access the money. This is because companies do not submit their applications directly to NBank, but to their house banks. “The auditions for this will take place at different times in the houses,” said a spokesperson.
Another reason for reluctance is that “the affected companies have not yet finalized concepts for more climate-friendly investments”. The current uncertainty in federal politics could play a role as key parts of the program focus on renewable energy and increased e-mobility.
The Minister had praised NBank as an “engine for renewal”.
Nevertheless, NBank accepts that the loan offers a good investment opportunity for companies in Lower Saxony. It allows household banks to provide loans quickly and efficiently with standard bank collateral to eligible customers. The house bank is released from 80 percent of liability by NBank.
Economy Minister Olaf Lies was convinced of the benefits of the program at the beginning. With the Investkredit, the NBank proves that it is “an important engine for renewal and changes in the Lower Saxon economy,” said the SPD politician in March.
The size of the investment loan per project is between 50,000 and 4 million euros and the term is between five and ten years. The interest rate is individual: It depends on the economic situation of the company and the value of the collateral. Small and medium-sized companies that are at least three years old, as well as freelancers who have been working on the market for at least three years, are eligible for funding.
2024-12-02 03:40:00
#Investment #loan #Saxony #demand #Saxony
## €250 Million Investment loan for Lower saxony SMEs: Why Aren’t Businesses Biting?
A €250 million investment loan aimed at bolstering small and medium-sized enterprises (SMEs) in Lower Saxony has seen a disappointing uptake, raising concerns about the effectiveness of such programs. Launched by the state’s development bank,NBank,the Investkredit was intended to support long-term investments and mitigate the impact of the war in Ukraine,but has only attracted €1.05 million in approved bids so far,with a deadline looming.
To shed light on this underwhelming response, we sat down with **Dr. Anna Schmidt**, an economist specializing in SME financing at the University of hanover, and **Herr Klaus Berger**, Head of Business Development at NBank. Their insights offer perspectives on the challenges facing SMEs in the current climate and the potential hurdles hindering the success of the Investkredit.
### Regulatory Hurdles and Uncertain Business Climate
**World Today News:** Dr. Schmidt, the article mentions regulatory requirements and a slow submission process through household banks. Could this be a meaningful barrier for SMEs?
**Dr. Schmidt:** Absolutely. For smaller businesses, navigating complex financial regulations can be daunting.The time and resources required to meet these requirements can be a major deterrent, especially when they’re already stretched thin.
**World Today News:** Herr Berger, NBank has acknowledged the delayed start and challenges related to the online portal. What steps are being taken to streamline the process and encourage broader participation?
**Herr Berger:** We are actively working with household banks to address these issues. We are exploring ways to simplify the application process and provide more tailored support to SMEs.We are also evaluating the possibility of extending the application deadline to give more businesses time to prepare their submissions.
### Lack of Climate-Friendly Investment Strategies?
**World Today News:** The article suggests that a lack of well-defined climate-friendly investment concepts could be a factor. Dr. Schmidt, how prevalent is this issue among SMEs, and what are the implications?
**Dr. Schmidt:** It’s quite common. Many SMEs are still in the early stages of assessing their environmental impact and developing sustainable strategies. The uncertainty surrounding future government support for renewable energy and e-mobility adds another layer of complexity.
**World Today News:** Herr Berger, how is NBank addressing this challenge? Are there specific initiatives to help SMEs develop these investment plans?
**Herr Berger:** Yes, we are committed to supporting SMEs in their sustainability journey. We offer workshops, consulting services, and access to industry experts to help them develop and implement climate-friendly investment strategies.
### Looking Ahead: The Future of the investkredit
**World Today News:** What are your predictions for the future of the Investkredit, Dr. Schmidt? Can it achieve its intended goals given the current circumstances?
**Dr. schmidt:** Its success hinges on multiple factors, including a stronger and more targeted outreach to SMEs, clearer guidance on climate-friendly investments, and potentially an extension of the programme deadline. Addressing the regulatory hurdles is crucial, but fostering a culture of sustainable investment will be equally crucial in the long run.
**World Today News:** Herr Berger,what’s your message to SMEs considering applying for the Investkredit?
**herr Berger:** Don’t hesitate! This program is a valuable opportunity to secure funding for vital investments,drive innovation,and contribute to a more sustainable future for Lower Saxony. We are here to support you every step of the way.
The Investkredit highlights a pressing challenge for governments and financial institutions: effectively channeling support to SMEs navigating a volatile economic landscape.While the initial response has been underwhelming, there’s still time for adjustments and improvements that could unlock the program’s full potential.
**Read More:**
* [Lower Saxon Economic Forecast 2024](link to relevant article)
* [NBank Sustainability Initiatives](link to relevant page or article)
* [Guide to Climate-Friendly Investments for SMEs](link to relevant resource)
What are your thoughts on this issue? Should the government intervene to stimulate greater uptake of the Investkredit? Share your views in the comments below.
