More money for medium-sized businesses: IKB Deutsche Industriebank and the European Investment Bank (EIB) are cooperating in granting loans to medium-sized companies. The institutes announced this on Wednesday. The banks want to support medium-sized companies with sustainable financing with a pot of money worth 400 million euros. The EIB is providing guarantees amounting to 200 million euros.
The target group is companies with up to 3,000 employees that need loans to finance more sustainable business models. According to IKB, a third of the loan portfolio is earmarked for projects that contribute to ecological change, for example by improving energy efficiency or reducing CO2 emissions.
According to FINANCE information, the banks are said to have agreed on a standardized lending process. This would give IKB freedom to decide which companies to grant loans to. In addition, the usual EIB standards apply: the companies must have locations within the EU, comply with EU law and must not operate in problematic sectors.
House banks benefit from EIB guarantees
The EIB guarantees are part of an EU-wide linked risk sharing program to support the sustainable transformation of SMEs. This customer group is usually outside the scope of the EIB. Therefore, it cooperates with house banks by providing loan guarantees for up to 50 percent of the loan amount. The EIB regularly cooperates with Deutsche Bank, among others, to support wind energy producers, projects for climate-friendly living and the sustainable transformation of medium-sized businesses.
The advantage for the house banks: They can use the EIB guarantees to reduce the burden on their risk-weighted assets (RWA) and thus offer their medium-sized customers twice the loan volume with the same risk. “This agreement strengthens IKB’s position as a provider of transformation financing for medium-sized companies,” said IKB CEO Michael Wiedmann.
Esra Laubach is an editor at FINANCE and focuses on the topics of transformation, restructuring and law. She is a language and communication scientist. Before FINANCE, she worked as a legal journalist for JUVE Verlag in Cologne for around five years, where she also completed her journalistic traineeship. During her studies, Esra Laubach worked in multimedia, including for the ARD morning magazine, several newspapers and presented at the Kölncampus university radio station.
