Rescue package for 850,000 small and medium-sized enterprises in emerging and developing countries

• EUR 25 million risk capital investment in the BlueOrchard COVID-19 support fund
• Fund to provide loans to ensure the liquidity of financial institutions in emerging and developing countries
• Important support for small and medium-sized enterprises as they deal with the impacts of the coronavirus pandemic
• The focus is on companies managed by women and rural areas

On behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) and as part of its Emergency COVID-19 Support Programme, KfW has invested EUR 25 million in the BlueOrchard COVID-19 support fund to maintain the supply of credit to micro, small and medium-sized enterprises (MSMEs) in developing countries and emerging economies that are struggling with liquidity bottlenecks caused by the coronavirus pandemic. The fund provides microfinance institutions and small banks with funds in the form of debt capital and risk capital to enable them to issue much-needed liquidity support to local companies and to grant extensions. It aims to reach 850,000 MSMEs, of which at least 70% are managed by women. In addition, 60% of the loans are due to be granted to customers in rural areas.

“More than 71 million people around the world are threatened with extreme poverty as a result of the coronavirus pandemic. In many countries, small and medium-sized enterprises are the backbone of the local economy and ensure important employment opportunities. The coronavirus pandemic is threatening the hard-won progress in fighting poverty over the last few years, calling for a particularly urgent response. As an anchor investor, KfW is a trailblazer and is providing a large portion of the risk capital in the new COVID-19 fund. By doing so, we are sending a strong single to international investors that together, we can shore up the existence of small companies,” says Dr Günther Bräunig, Chief Executive Officer of KfW Group.

The BlueOrchard COVID-19 support fund has a target volume of USD 350 million and is open to both private and institutional investors. The first financing round alone successfully mobilised USD 140 million. A special investment window ensures that at least 35% of the fund volume goes to countries in Africa and Asia.

More information on KfW Development Bank is available at:
www.kfw-entwicklungsbank.de/en