Loan to municipality by citizens

Municipalities cover their financial requirements by accepting loans from their citizens. The interest rate is usually set at a level that is more favorable for the municipality than a bank loan. – In Germany, such forms of financing require a license because they relate to the deposit-taking business pursuant to Section 1, Paragraph 2 of the German Banking Act (KWG). – Cf. Annual Report 2009 of BaFin, p. 228 f. (permission must be obtained from BaFin).

Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent!
University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/