Germany is undergoing a significant digital transformation in the financial sector, driven by advancements in technology and a growing demand for secure digital banking services. The continuing shift toward digital channels was accelerated by the COVID-19 pandemic, which further emphasized the need for accessible, efficient, and transparent financial services.

Today, around 20% of German consumers already use digital credit services. Similarly, small and medium-sized enterprises (SMEs) are beginning to embrace digital lending, with approximately 8-10% of businesses now apply for credit through digital channels. While this shift is significant, large companies still account for a much smaller share of digital credit users, with fewer than 5% accessing credit through these digital platforms. 

Why do consumers and businesses apply for credit through digital channels?

When private individuals apply for credit through digital channels, they typically do so for a variety of purposes, ranging from everyday needs to larger purchases. Some of the most common reasons include:

  • Home, Garden, and DIY Projects to enhance living spaces;
  • Debt Restructuring to replace existing loans with more favorable terms to ease financial burdens;
  • Cars and Motorcycles to improve personal mobility;
  • Liquidity to cover unexpected expenses or to maintain financial stability;
  • Holidays and Travel to finance dream vacations;
  • Consumer Electronics like televisions or computers.

Education, family support, special occasions, and health-related expenses also rank highly among the most common reasons for requesting personal loans. 

On the other hand, the main reasons driving businesses toward digital channels are more closely related to operational needs and growth. These reasons include:

  • Investments: Businesses often take out loans for the purchase of tangible assets such as machinery and buildings, as well as for software and for investments in research and development (R&D). These investments help companies innovate and expand their capabilities.
  • Working Capital: Financing short-term operating expenses, including salaries, invoices, and inventory, is another primary reason for business loan applications. Access to working capital ensures that businesses can meet their daily operational needs and continue to function smoothly.
  • Expansion: As businesses grow, they often require loans to fund expansion efforts. This can include entering new markets, opening up branches, or scaling operations to meet increased demand.
  • Bridging Liquidity Gaps: In some cases, businesses may need short-term financing to cover payment arrears or cash flow irregularities. Bridging liquidity gaps allows companies to stay afloat and avoid financial disruptions during tougher times.
  • Startup Financing: Many startups rely on business loans to support their initial phase of growth. Loans provide the necessary capital for financing operations, product development, and other crucial aspects of establishing a new business.

CRIF’s role in enabling digital credit access in Germany

Since its entry into the German market, CRIF has played a crucial role in enabling more people to access credit, transforming the way financial institutions assess credit risk and provide lending services.

CRIF’s role in expanding access to credit through digital channels underscores its commitment to innovation and financial inclusion. By delivering advanced credit risk management solutions and actionable insights, CRIF empowers financial institutions make smarter lending decisions, thereby supporting business growth across Germany.

In 2023, lenders in Germany granted approximately €7.6 billion in instalment loans entirely through digital platforms, representing a significant share of the total €49.8 billion in instalment loans granted. With nearly one in five Germans already taking out loans online, and smaller loan amounts under €2,500 predominantly financed digitally, the growing role of online lending is clear. CRIF’s innovative solutions are at the forefront of this digital credit revolution, providing both businesses and consumers with the tools and resources needed to access credit more easily and securely. Through its data-driven approach and commitment to financial inclusion, CRIF is not only helping to streamline the lending process but also contributing to the development of a more efficient and inclusive financial ecosystem.

By empowering businesses of all sizes, CRIF is driving economic growth and making credit more accessible for all.

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