News from 2020-06-18 / KfW Research
KfW Credit Market Outlook June 2020
More loans for businesses in the coronavirus crisis – new lending up sharply
The coronavirus crisis has led to a sharp increase in lending dynamics. According to calculations by KfW Research, new lending to businesses and self-employed persons in Germany grew by 7.3% year-on-year in the first quarter. The growth rate thus nearly doubled on the final quarter of last year.
At the start of the coronavirus outbreak in March, access to short-term loans was a particularly important instrument for closing the abruptly emerging liquidity gaps. Even if the recovery has begun, German companies are still grappling with severe turnover losses in the pandemic. We therefore expect credit growth to continue increasing and reach its peak in the second quarter.
A number of economic policy measures are facilitating access to loans for businesses, making it easier for banks to expand their credit supply even amid rising risk costs. These measures also include the recently adopted economic stimulus programme.
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