KfW, the German development bank, and the Ministry of Finance of the Peoples Republic of China have signed an agreement for a €19.2mn loan to fund a Credit Programme for small and medium-sized enterprises (SMEs).
China Merchants Bank (CMB) will implement the programme. The aim is to improve access for private SME to medium and long-term loans. The second component of the agreement contains the training for bank staff to improve skills for granting loans with long maturities. A grant of €1mn is provided for this purpose.
Funds for German financial cooperation are provided by KfW on behalf of the German government and mainly originate from the budget of the German Ministry for Economic Cooperation and Development.
The credit programme is a continuation of KfW’s commitment to financial and private sector promotion in China. The Sino-German cooperation has a long-standing history. Since 1988 the KfW has provided roughly €170mn for credit programmes for SMEs.
Within Sino-German financial co-operation China has received loans from KfW amounting to €1.85bn and grants of €350mn since 1985. Sino-German Financial Co-operation focuses on the areas of natural resource protection, economic reform and development of the market economy, waste water and waste disposal as well as transportation.