Hamburg bank offers preferential 'climate credits' to lure small savers to green finance

The cooperative bank Sparda in Germany's second largest city Hamburg is trying out a new "climate credit" scheme that is supposed to help clients finance more climate-friendly purchases such as  electric cars or energy efficient retrofitting of their homes, the Hamburger Abendblatt reports. The climate credits are issued an interest rate that is 0.5 percentage points lower than conventional credits, Sparda-Bank's Stephan Liesegang told the newspaper. While many banks in Germany and elsewhere have begun to offer sustainable investment products, Sparda hopes that its new sustainable credit scheme is going to lure customers to the bank. While some other banks are offering credits at lower rates, these are not always accessible to all clients. "We're not making this kind of distinction," Liesegang said. "Everyone who's creditworthy will get it." Also the state-owned German development bank KfW is offering credits at lower rates for people who need money to modernise their homes and make them more energy efficient, but these credits usually come with a lot of conditions and red tape that can let potential clients hesitate. The Sparda-Bank says its offer is supposed to be a supplement for those who quickly want to make investments without having to comply with a lot of funding conditions.

While larger investors, banks, insurances and the German state have begun to quickly expand their activities in the booming green and sustainable finance sector, smaller individual investors in the country with average incomes to spend have been largely shying away from selecting investments that focus on non-financial criteria. The country's cooperative and public banks, which are often well-rooted in local societies and cater to many small companies, are seen as playing a key role in the effort to establish sustainable finance principles across society.