Germany's KfW pays out 8.5 billion euros in coronavirus aid loans

Germany’s state development bank KfW has received applications for 26 billion euros of emergency coronavirus loans and has so far approved 8.5 billion euros worth, a government document seen by Reuters showed.

The figures, compiled by the finance and economy ministries, show KfW approved 98% of loan applications from more than 13,000 companies, with a small number of applications requesting an unusually large amount of funds still being checked.

German electronics retailer Ceconomy said last week it would apply for state-backed loans after the pandemic pushed it into an operating loss in the fiscal second quarter.

Sources told Reuters on Tuesday that the company expected a decision on a KfW credit line later in the day.

Chancellor Angela Merkel’s government has agreed a rescue package worth more than 750 billion euros ($812 billion) to mitigate the impact of the coronavirus outbreak on Europe’s largest economy, with the government taking on new debt for the first time since 2013.

The measures include a debt-financed supplementary budget of 156 billion euros and a stabilisation fund worth 600 billion euros for loans to struggling businesses and direct stakes in companies.

Finance Minister Olaf Scholz and Economy Minister Peter Altmaier have promised unlimited liquidity support through KfW loans to help firms hit by measures to contain the pandemic.

The government is also helping small businesses and the self-employed threatened with bankruptcy with direct payments of up to 15,000 euros that don’t have to be paid back.

The take-up under this programme rose to more than 9 billion euros with 1.1 million applications on Monday afternoon from 8 billion euros with 1 million applications last Wednesday, the document showed.