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Confronting demographic change
There are many challenges associated with changes in populations. While many developing countries are having to secure basic supplies and services for an increasing number of people, populations in industrialised countries are ageing.
This is a result of low birth rates and high life expectancy. These trends will constitute significant challenges for Germany in the coming decades. It is not just a case of maintaining the well-developed social security systems and adjusting infrastructure to suit the ageing population. Rather, the challenge lies in safeguarding the current level of prosperity with a steadily declining, albeit well-qualified, workforce. Education finance of the KfW Group helps to prepare young people to meet the professional requirements of the future, thereby securing Germany's economic power in the long run. The bank also supports the age-appropriate modernisation of living space.
Age structure in Germany
For every 100 citizens of working age (20 to 65 years) there are...
| 2008 | 2020 | 2030 | 2040 | 2050 | 2060 | |
| Under 20s | 31.5 | 28.6 | 30.7 | 30.8 | 30.0 | 30.9 |
| 65 year-olds and older | 33.7 | 39.2 | 52.8 | 61.9 | 64.4 | 67.4 |
From 2020, estimates of the 12th coordinated population projection, variant: "medium" population, lower threshold; source: Federal Statistical Office (2009).
Education as a competition factor
In the future, a steadily declining number of workers will have to cover a rising demand for qualified positions in Germany. This requires an increase in the proportion of graduates. KfW helps students to finance their living expenses.
From an economic perspective, the share of the working population relative to the total population is a crucial factor for the economic strength of a country. The higher it is, i.e. the fewer young and elderly people a society has to provide for, the more it can produce over and above its current needs – and subsequently invest as well as accumulate capital.
Thus, one of the largest socio-economic challenges of the coming decade is to maintain the current level of prosperity and well-developed social security systems in Germany with fewer and increasingly older workers. This can be achieved by increasing labour productivity, to which end the inherent potential in the labour force must be fully exploited, making them fit for the requirements of the future market.
Germany has few natural resources, and is already a knowledge-based society characterised by sophisticated services. Many simple jobs will disappear in the coming decades, while the number of highly-qualified positions will increase. In this context, bottlenecks on the labour market will start appearing by 2020 at the latest. This makes increasing the number of graduates an important political objective.
KfW improves student financing
Thanks to the KfW student loan launched in 2006, students can draw up to EUR 650 every month under favourable conditions and without unnecessary red tape, regardless of the wealth and incomes of their parents. This can also be combined with other promotional products such as the Federal Education and Training Assistance (BAföG) or scholarships, while the monthly disbursement rates can be altered flexibly depending on the prevailing study and living conditions. Borrowers tend to opt for sums between EUR 400 and 500 on average. When the repayment period begins you can opt for a grace period of up to 23 months, and adjust the amounts to suit your individual financial situation.
More than 100,000 KfW student loans have already been awarded, including more than 22,000 in 2011. This makes it the clear market leader in what is still the relatively young segment of educational loans in Germany. All told, state providers, student administrations as well as banks, savings banks and education funds disbursed almost 47,000 student loans in 2011. In contrast to what is offered by commercial banks, borrowers of KfW student loans do not require any collateral – which helps students from low to middle social classes in particular. An external survey from 2010 revealed that KfW student loans had motivated many people to start a course in previous years.
Improving access to higher education in Germany and increasing the number of new students: these were the goals set by KfW when it launched its student loan project in 2006. Just how much the loans have fulfilled requirements was assessed by the bank in autumn 2010 in conjunction with experts at the German Institute for International Educational Research (DIPF) in an online survey conducted with almost 4,000 borrowers. Key results:
| 46 % | of those surveyed have a medium or low socio-economic background, compared to 41% of all students. This means a greater than average number of people in target groups have been reached. |
| 86 % | indicate that they could not have studied without the KfW student loan, with even higher figures registered for borrowers from middle and lower social classes. The loans therefore contribute to raising the proportion of students. |
| 57 % | of borrowers receive money from their parents for living expenses - significantly fewer than for all students in Germany (87%). Thus, KfW student loans help to close a financing gap. |
| 91 % | are satisfied with the conditions of the KfW student loan, and 30% very satisfied.. |
Source: German Institute for International Educational Research (DIPF) (2011).
Thinking of tomorrow, today, and making living space barrier-free
Germany is ageing. This is creating a massive need for barrier-free apartments and houses in the coming years. KfW promotes the early, age-appropriate modernisation of properties to improve living conditions for residents of all ages.
Using our Age-Appropriate Conversion funding product we help private, cooperative and association homeowners shoulder the burden of measures for barrier-free conversions. From 2009 until the end of 2011, KfW used German federal budget funds to promote the modernisation of 82,348 residential units, thereby triggering an investment volume of just under EUR 1.4 billion. The majority of the conversions involved private households. However, measured in terms of their share in Germany's entire housing stock, housing companies and associations make particularly intensive use of this funding opportunity.
Simplified access requirements
Creating barrier-free living space is of crucial social significance for Germany and therefore KfW. This is why we have continued with the Age-Appropriate Conversion product since 2012, using KfW funds and applying simplified access requirements. Homeowners can receive a low-interest loan of up to EUR 50,000 per residential unit for the barrier-free conversion of their property as well as for the associated planning and advisory services. Whether the property is in own use or rented out is irrelevant here, as is the age or physical disability of the applicant. This creates an incentive to tackle the age-appropriate modernisation of residential buildings in Germany as early as possible. Further KfW funding is available to those who can link such projects up with energy measures.
New quality standard
We are pushing further ahead with age-appropriate living with a new quality standard. Since April 2012 we have issued the KfW Age-Appropriate House or Age-Appropriate Apartment Standard for properties that have been fully converted to become barrier-free. This is comparable with the established KfW Efficiency House label, and requires in-depth consulting as well as an expert appraisal of the property. This sophisticated seal of quality serves as proof of a comfortable living environment, particularly for lessors, benefiting not only the elderly and people with special needs, but also families.
Promotional measures from April 2009 to December 2011
| Funding: EUR 869 million Development systems Measures in apartments Sanitary facilities Miscellaneous | Ratio 41 % 26 % 24 % 9 % |
| Funded residential units: 82,348 Private households Housing companies Housing cooperatives Territorial authosities Churches/charities | Ratio 47 % 27 % 24 % 0.6 % 1.0 % |
Differences in the totals are due to rounding; Source: KfW.
KfW promotional product - barrier-free city
German cities and communities are facing huge challenges in the coming years as a result of demographic change. Public space in general needs to be adapted to the needs of an ageing population.
KfW launched "Barrier-Free City", a new promotional product, in September 2012. Municipalities, municipal companies and social organisations can receive very reduced-interest loans to lower barriers in public spaces, in municipal traffic infrastructure and sports facilities as well as in municipal and social infrastructure buildings. The financing also includes the costs of any necessary extra work, consulting and planning.
We support investment measures in the following areas:
- Public buildings (for example elevators, ramps, barrier-free parking spaces, door-openers, broader areas in rooms as well as toilets and washrooms, no-slip floor coverings, visual and tactile direction signs)
- Transport (for example barrier-free access to underground and tram stations, over- and underpasses)
- Public space (for example low pavements, guidance and aids for blind and visually impaired people)
Certain technical requirements apply to ensure the overall quality of the funded measures.
