KfW initially gained experience conducting reconstruction in Germany and later became active in other countries as well: in many poor areas of the world KfW Development Bank helps to promote the economy, reduce poverty and provide people with health care, education and a future. On behalf of the Federal Government KfW implements Financial Cooperation, the success of which is measured by what has been achieved for the people – in a sustainable manner for the next generation too. In the meantime KfW has become one of the largest development banks in the world. The KfW subsidiary DEG finances companies that invest and create jobs in developing countries.
KfW promotes development
On behalf of the Federal Government, KfW Development Bank administers Germany’s official Financial Cooperation in more than 100 developing and transition countries in Africa, Asia, South and Central America, the Middle East and the Caucasus. Its priority areas of activity include poverty reduction and economic development, good governance, education and health care, and protection of the climate and the environment. In this way the bank helps the Federal Government achieve its developmental goals.
In the financing and advising of projects and programmes, it is particularly important for KfW that direct poverty reduction be accompanied by the creation of viable structures. Only in a favourable environment can women and men exercise their political rights, secure their economic livelihood and build their lives in dignity.
Small money - big impact
The development of microcredit follows a similar concept. KfW was quick to recognise that it makes sense to enable even the poorest people to set up businesses with microloans. Women in particular are seizing the opportunity to build their own livelihoods. Many of these micro businesses grow with the aid of additional loans, providing a route out of poverty. KfW is one of the leading financiers of microcredit in developing countries.
In addition to poverty reduction, preserving the bases of life has become an increasingly important field of activity over the past years. Only where economic conditions are sustainable and natural resources are not being depleted can economic development be self-sustaining in the long term. For example, the fact that KfW has been instrumental in bringing deforestation rates in the Brazilian rainforests to a near standstill testifies to the increasing significance of environmental and climate protection. KfW is also the world's leading financier of renewable energies in developing countries.
DEG is one of the largest European development finance institutions. Since its founding in 1962, DEG has been committed to improving the living conditions of the people in partner countries. It finances and structures investments of private companies in developing and transition countries in order to contribute to sustainable growth and expand economic structures.
This entrepreneurial development cooperation is an important element of development policy: Successful, viable private enterprises generate economic growth in the partner countries. They create jobs and income, contribute to improving the country’s balance of payments by producing competitive products, add to state revenues with their tax payments, and increase the value created in the country by processing locally available resources.
DEG performs its role as development finance institution for the private sector in two ways: It is a reliable financing partner for private enterprises that invest, but it also seeks to ensure that their investments have positive impacts on the societies in developing countries. DEG commits exclusively to projects that are developmentally sound and environmentally and socially compatible. With its work DEG contributes to the Millennium Goals, the shared commitment of industrial and developing countries to sustainable poverty reduction.