News from 2020-12-15 / KfW Research
KfW Credit Market Outlook December 2020
The trend reversal is here: New lending has cooled considerably
KfW Research has calculated that new lending to enterprises and self-employed persons lost momentum in the third quarter. Banks extended just 0.3% more corporate loans than in the same period last year. That is in sharp contrast with the strong growth rates in the first half of the year.
The difficult situation of businesses in the coronavirus crisis has weighed heavily on investment activity. Loans to finance capital expenditure are hardly in demand. At the same time, the economic recovery over the summer months and businesses’ adaptations have reduced their need for liquidity. Credit institutions are moderately tightening their lending standards.
The decline in lending momentum can be expected to continue and accelerate. It is therefore all the more important to keep access to credit open for companies that want to invest now in order to be prepared for future challenges and opportunities.