• Corona pandemic increases borrowing needs
  • Every second municipality wants to use digital lending platforms

Cologne, 09 July 2020: The digitalisation of administration is gaining momentum: Every fifth municipality in Baden-Württemberg relies on online lending platforms for debt financing. Half of the municipalities plan to make greater use of platforms in the future.

This is the result of a study conducted by the fintech Loanboox in cooperation with the University of Applied Sciences Konstanz. Around 160 municipalities from Baden-Württemberg took part in the survey. An overwhelming majority (82%) of the participating cities, municipalities and municipal associations have a population of 5,000 to 50,000.

One focus of the study was the question of the degree of digitalisation of municipal credit management. Among other things, the study examined the extent to which digital financing platforms are already being used by Baden-Württemberg’s municipalities.

Corona pandemic increases borrowing needs

Against the backdrop of the decline in revenues as well as the increase in expenditures, the municipal level anticipates greater indebtedness as a result of the Corona crisis. Three quarters of the surveyed municipalities (75%) expect the expected need for debt capital to increase within the next three to five years. Another 17 % of the study participants expect a constant need for debt capital, whereas 5 % forecast a decrease. Due to this development, municipalities under pressure will use new tools to raise debt capital. This includes, for example, the use of online lending platforms.

Digital solutions are becoming increasingly important for municipalities

Every fifth municipality (20 %) has already used such a digital marketplace. This trend will increase in the future. The majority (52 %) of the study participants plan to make greater use of online tenders. The willingness to use them increases with the number of inhabitants. The larger a municipality is, the more open it is to using digital solutions to meet municipal financial needs.

From the perspective of the municipalities surveyed, the advantages of credit platforms lie primarily in the comparability of offers (16%), the transparency of the cost structure and the independence of the platforms (15%). Furthermore, the ease of use (15%), data security (13%) and better conditions compared to regular credit tenders (12%) are relevant.


About Loanboox
Loanboox is the independent debt capital market platform. It connects companies and public sector institutions seeking capital with investors. Participating parties can negotiate on the platform without intermediaries and conclude loan transactions completely digitally. Since the launch of Loanboox in Germany in October 2017, financing of more than 7.5 billion euros has been requested via the platform. Around 600 borrowers and 150 capital providers from Germany are now connected to the platform.