We assign 15 to 20 percent of our capital as loans, primarily to housing projects but also to companies and political organizations. These loans are a direct investment where our money really makes a difference.
By giving these types of loans, we invest in participants that otherwise have limited access to the capital markets. Our lending is suited for projects that need money but cannot apply for complicated financial instruments such as a participation certificate.
The loans are guaranteed by a mortgage, an assignment of claims or by bails, and paid interest by the current market rate.
However, the Banking Act gives strict restrictions on granting loans. Without permission of the federal office for financial services, we are not allowed to grant more than 20 single loans with a total amount of € 500,000.