Loans Are Usually On-Lent through Regular Banks
Obtaining a loan – via a regular bank or directly from KfW
Loans from KfW are available practically around the corner. It is true that KfW has no branch offices of its own. But savings banks, cooperative banks and commercial banks are KfW's main distribution partners. The bank conducts the appraisal of the borrower, evaluates their plans and decides whether to finance the project and to apply for a loan from KfW. Once the loan has been approved by KfW, the bank on-lends the KfW funds to the borrower.
For the borrowers – private individuals and enterprises – this on-lending principle practised by KfW carries the advantage that the bank and the borrower usually know each other already. This makes it easier for the bank to accurately judge the plans. A relationship of mutual trust usually exists that facilitates the loan decision. Of course borrowers are free to choose the bank through which they want to apply for KfW loan funds. It does not have to be the bank they have been with for years.
KfW often simplifies the granting of a loan, for example by assuming part of the liability. Currently KfW assumes up to 80 per cent of the credit risk for certain promotional products.
Grants are disbursed directly by KfW
One exception to the on-lending principle applies to grants. Currently, grants are available for energy-saving investments in homes which can be applied for directly with KfW and are disbursed directly by KfW to the recipients. In general, KfW provides loans directly to public borrowers such as cities and municipalities.