1. 34th ADFIAP Annual Meeting April 20 to 23, 2011, North Cyprus “Responding to Global Issues & Trends: The Strategic Role, Resources and Relationships of National Development Finance Institutions” DFIs and SME Finance: Building Capacity for SME Development and Innovative Financing Mechanisms “ Advisory Support for SMEs during their Life Cycle” Barbara Schnell, Division Chief Financial and Private Sector Asia

2. Agenda KfW’s Advisory Support for SMEs 4 Finance and Advisory Support during the Life Cycle of SMEs 3 Conclusions 5 KfW Bankengruppe: Overview 1 Global Challenges 2

4. A Bank with a Wide Array of Functions Promotion of developing and transition countries International business Promotion of construction of new housing and modernisation as well as education Promotion of SMEs, business founders, start-ups Municipal infrastructure projects and global loans in Germany/Europe Domestic promotion We promote the German economy International project and export finance We ensure internationalisation We promote development Promotion of environmental and climate protection: 25.3 bn Business Area SME Bank Business Area Private Client Bank Business Area Municipal Bank Business Area Export and Project Finance Business Area Promotion of Developing and Transition Countries Funding 2010: 64.3 bn EUR Funding 2010: 5.7 bn EUR Funding 2010: 9.3 bn EUR

5. Agenda KfW’s Advisory Support for SMEs 4 Finance and Advisory Support during the Life Cycle of SMEs 3 Conclusions 5 KfW Bankengruppe: Overview 1 Global Challenges 2

6. Global Challenges Sustainable Economic Growth / Pro-Poor Growth Global Division of Labour Shortage of Resources Population Growth Competitiveness Climate Change Job creation Structural Changes Framework Conditions Good Governance Peace Income Distribution Gender Issues Poverty Reduction Demographic Change

8. Agenda KfW’s Advisory Support for SMEs 4 Finance and Advisory Support during the Life Cycle of SMEs 3 Conclusions 5 KfW Bankengruppe: Overview 1 Global Challenges 2

10. Phases of the Organizational Life Cycle: Need of Special Advisory Support t Advisory support for special promotional purposes Start-up Finance Growth Capital Finance for Special Promotional Purposes Combination of capital and advisory support (e.g. Venture Capital) Separate advisory support Start up-Companies Business Founders Mature Companies/ Declining Companies Turn around advisory services Growing Companies/ Established Companies Profit/ Growth

11. Agenda KfW’s Advisory Support for SMEs 4 Finance and Advisory Support during the Life Cycle of SMEs 3 Conclusions 5 KfW Bankengruppe: Overview 1 Global Challenges 2

13. KfW’s Promotional Approach: Companies with a Need of Special Advisory Support t High-Tech Founder Fund (PPP) - Companies up to 1 year - Equity in combination with strong advisory support ERP Start-up Fund for technology-based companies Equity and advisory support through Lead-Investor-Model „ Start-up Coaching in Germany“ for business founders/ business start-ups Special promotional purposes: Energy efficiency advice for SMEs Initial advice and/or detailed consulting Round Table for companies experiencing economic difficulties (in cooperation with chambers/ external advisors) “ Turn around” advisory services Advice on a company’s economic, financial and organizational questions Start up-Companies Business Founders Mature Companies/ Declining Companies Growing Companies/ Established Companies Profit/ Growth

14. Early Stage (1) High-Tech Start-ups: Combination of Financing and Advisory Support Technology Start-up - Risk Capital Founder - Management Support Investor Coach High-Tech Founder Fund Government, KfW, BASF, Zeiss, Daimler, Siemens, Deutsche Telekom

15. Early Stage (2) Broad-based Initial Advisory Services for SMEs: “Start-up Coaching in Germany” max. for 12 months Special Conditions for starting a business out of unemployment Grant: 50%, 75% or 90% of total costs Consulting Services and Coaching Total costs: up to 4.000 EUR or 6.000 EUR up to 5 years after foundation Application via KfW‘s regional partners 2010: ca. 29.000 commitments

16. Special Promotional Purposes: Energy Efficiency Advice for SMEs Detailed consulting Initial Advice Grant: 60 % of costs 1 – 2 days of consulting In-depth energy analysis of energy saving measures and investments, savings potential and cost effectiveness Grant: 80% of costs Total consulting costs: up to 8.000 EUR Reducing information deficits about energy saving options Application via KfW‘s regional partners 2010: ca. 4.800 commitments

17. Established SMEs with Need for Improvement: “Round Table” and “Turn Around“ Advisory Services Round Table „ Turn Around“ Advisory Services Target Group Advisory services for SMEs experiencing economic difficulties owing to unexpected economic developments. Advisory services for SMEs in economic difficulties, but with a positive business forecast. Analysis of weak points already completed. Procedure External advisors analyses the weak points and offers proposals for their solution. “ Round table” with participation of all lenders. Implementation of measures: External advisor coaches the company to cope with the identified weak points and to improve and restore the capacity and competitiveness of the company. Grant EUR 160 per day of work for advisor/ project monitor (max. 10 days) 50% or 75% of the costs Max. EUR 8,000 Partners Regional partners Chambers of Commerce/ Trade/ Crafts Regional partners Chambers of Commerce/ Trade/ Crafts; Local business development institutions Commitments in 2010 Ca. 2.500 Ca. 1.700

18. Agenda KfW’s Advisory Support for SMEs 4 Finance and Advisory Support during the Life Cycle of SMEs 3 Conclusions 5 KfW Bankengruppe: Overview 1 Global Challenges 2