KfW said last week that the standardization of its securitization platforms - PROMISE and Provide - facilitated their use for a variety of loans. According to figures reported by KfW, since 2000, portfolios totaling around 90 billion had been securitized through these platforms.
The first half of 2006 saw these platforms securitize a portfolio of Eastern European SME loans via Roof-CEE 2006-1 and a portfolio of loans to housing companies in eastern Germany via primus MULTI HAUS 2006.With primus MULTI HAUS, a new class of assets was created and the bank said it would continue to focus on developing similar securitizations of loans to small and medium sized enterprises.
PROMISE has also contributed to the creation of a liquid secondary market for SME loans, providing long-term support to SME lending. KfW said that it launched its own SME ABS portfolio at the end of 2005 with the aim to give SMEs better access to financing. The program has reached 2 billion and KfW acts as an anchor investor. It has so far invested roughly 500 million through this program.
"At KfW we are continuing to focus on enhancing the market for securitizing SME credit risk, the objective being to further mature ABS products in this market segment," a company spokesperson said. "In terms of providing loans for small SMEs, it will be crucial in the medium term for loan products and securitization to be brought closely into line. Initial moves are being made in Germany."
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