Revolving loan fund gives BFS 1974 long-term financial scope for lending to charitable institutions.
The Federal Republic of Germany provided BFS with approximately 452 million German marks in 80 loan agreements from 1957 to 1974. In the meantime, the BFS has repaid just under 65 million; there are therefore repayment obligations of around 387 million deutschmarks. The Federal Association of Voluntary Welfare Workers (BAGFW) and the BFS are therefore developing a plan to move away from the issuance of more and more loan agreements by the federal government to a permanent smarter solution: Already after World War I, the relief fund of the time had administered and disbursed federal loan funds under a so-called revolving institutional loan fund. The special feature of the revolving credit fund: repayments by borrowers are not returned to the state, but can always be reissued as loans. Thus, the fund volume is permanently available for financing projects of welfare institutions.
Dr. Ralf Kleindiek (l.), State Secretary at the Federal Ministry for Family Affairs, Senior Citizens, Women and Youth (BMFSFJ), and Prof. Dr. Harald Schmitz, Chairman of the Management Board of the Bank fur Sozialwirtschaft signed on 17. January 2018 the new revolving fund agreement.
Photo: Picture credits: Press office BMFSFJ
Dr. Ralf Kleindiek (l.), State Secretary at the Federal Ministry for Family Affairs, Senior Citizens, Women and Youth (BMFSFJ), and Prof. Dr. Harald Schmitz, Chairman of the Board of the Bank for Social Economy signed on 17. January 2018 the new revolving fund contract.
Dr. Ralf Kleindiek (l.), State Secretary at the Federal Ministry for Family Affairs, Senior Citizens, Women and Youth (BMFSFJ), and prof. Dr. Harald Schmitz, Chairman of the Board of the Bank fur Sozialwirtschaft sign on 17. January 2018 the new revolving fund contract.
Photo: Picture credits: Press office BMFSFJ
Representatives of the welfare sector, the BMFSFJ and the BFS are pleased about the signing of the revolving fund contract until 2050.
Revolving trust fund as a unique selling point of the welfare bank
A great deal of persuasion is required before such a revolving fund can be set up on 12 December 1974 in cooperation with various ministries. December 1974, such a revolving fund contract can be concluded between BFS and the Federal Republic of Germany, represented by the Ministry for Youth, Family and Health. A thoroughly historic date: not only because the revolving fund contract with the FSO offers a financing option that is as flexible as it is long-term, but also because it represents a unique selling point for the social bank.
Granting of interest-free loans to the welfare sector secured for the long term
Now the FSO will no longer receive any more federal loans. Instead, a trust fund of 345 million deutschmarks is created from the remaining debts, from which the Bank grants interest-free, earmarked loans to associations and institutions of the non-statutory welfare sector. Initially, it will be able to do so until the end of 2000; in the following 25 years, the repayments made to the BFS will be used to repay the federal government. In the context of German unification, the agreement is supplemented in 1991: To build up welfare services in the new federal states, the federal government provides the fund with a further 100 million deutschmarks, which can be granted as loans until the end of 2019. The eligibility of the measures is first decided by a loan committee made up of representatives of the umbrella organizations of the Freie Wohlfahrtspflege, and in a second step by an award committee consisting of one representative each from the Federal Ministry and the BFS.
"I am pleased that it has been possible to secure the contract as a financing instrument for the next decades. I would like to thank the Bank fur Sozialwirtschaft and the voluntary welfare associations for their commitment to expanding and shaping the social infrastructure of the Federal Republic of Germany with sustainable social investments. In the realignment of the revolving trust fund, I see an opportunity to successfully meet the current challenges, especially those of demographic change. In this way, we help strengthen social cohesion in East and West Germany."
Dr. Ralf Kleindiek State Secretary at the Federal Ministry for Family Affairs, Senior Citizens, Women and Youth (BMFSFJ)
"We then jointly achieved, the Ministry of Family Affairs, the Bank and Freie Wohlfahrtspflege, that the federal revolving fund contract has been extended for another 30 years from 2020, but now no longer related to new federal states, but to the whole of Germany again."
Claus Helmert was Finance Director of the Paritatischer Gesamtverband until July 2020 and a member of the Finance Commission of the Federal Association of Voluntary Welfare Workers (BAGFW).
2018: extension of the revolving fund contract until 2050
Because the revolving credit fund has become indispensable for financing social institutions – especially in view of demographic change – the agreement is extended in 2018 and expanded to cover the whole of Germany. For a further 30 years, starting in 2020, charities will be able to finance projects from the federal government's 176 million euro trust fund through interest-free loans via BFS – repayments will only have to be used for repayment from 2050 onwards.
Manfred Kleefisch, as head of the Fiduciary and Administrative Credit Department at the FSO, was the central point of contact for the Welfare Associations and the Ministry of Families for the Revolving Fund for about 30 years. The revolving fund contract until 2050, before he switches to passive semi-retirement in 2020.
Photo: Photo credit: BFS
Manfred Kleefisch, as head of the trust and administrative loans department at the FSO, was the central contact for the welfare associations and the Ministry of Family Affairs for the revolving fund for about 30 years. The revolving fund contract until 2050 he significantly shapes, before he switches in 2020 to the passive semi-retirement.
Manfred Kleefisch, as head of the trust and administrative credit department in the FSO, was the main contact for the charities and the Ministry of Family Affairs for the revolving fund for about 30 years. He plays a major role in shaping the revolving fund contract until 2050, before switching to passive semi-retirement in 2020.
Photo: Photo credit: BFS