News from 2021-10-18 / KfW Research
KfW Credit Market Outlook September 2021
Slump in credit growth has bottomed out
German companies and the self-employed took out considerably fewer loans in the second quarter than in the previous year. According to calculations by KfW Research, new lending by banks and savings banks with commercial customers shrank by 12.7%. The last time there was a higher percentage decline was during the global financial crisis.
The driving force behind the weakness remains low corporate loan demand. In particular, new loans for short-term funds up to one year are at a low level. The better economic situation and the accelerated flow of state aid payments are likely to be decisive for this.
Even if there is much to suggest that credit growth may emerge from the trough in the second half of the year, it will still take a while for growth rates to turn positive again. In our estimation, this should be the case in early 2022.
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