KfW and Federal Ministry for Economic Affairs strengthen digitalisation and innovation in SMEs

• New grant supports existing ERP Digitalisation and Innovation Loan
• Amount is 3% of the loan and a maximum of EUR 200,000
• Additional incentive for investments by medium-sized enterprises

The German Federal Ministry for Economic Affairs and Climate Action (BMWK) and KfW are further improving the lending conditions for SMEs. From 20 February 2025, KfW will offer a new grant for future-oriented investments on behalf of the Federal Ministry for Economic Affairs and Climate Action. This adds another component to the existing ERP Digitalisation and Innovation Loan. KfW provides the funds for this from income the ERP Special Fund which is recognised as part of its equity.

The instrument will help to increase the low level of innovation activity of German SMEs and simplify urgently needed investments. The ERP Digitalisation and Innovation Loan promotes investments in important projects at particularly favourable interest rates. The new supplementary grant provides entrepreneurs with an additional incentive to prepare for the future and invest in digitalisation or innovation.

Applications for grants can be submitted by self-employed professionals and medium-sized enterprises with a turnover of up to EUR 500 million per year; commitments are possible from 20 February 2025. The amount of the grant is three per cent of the disbursed loan and a maximum of EUR 200,000. The application is submitted to the local regular bank together with the loan application.

Further information on the ERP Digitalisation and Innovation Loan and, from 20 February 2025, also on the new grant can be found at: www.kfw.de/380

Here you can find KfW Research’s 2024 KfW SME Panel.

Information on the European Recovery Program (ERP) and the ERP Special Fund can be found here: The Marshall Plan and the ERP | KfW