Germany Firm Durr Receives €750M Loan via Blockchain
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Germany Firm Durr Receives €750M Loan via Blockchain

Bhupinder Kour
By Bhupinder Kour| Saturday, August 10, 2019 08:58 AM |1 min read
Germany Firm Durr Receives €750M Loan via Blockchain

Blockchain, the technology underlying Cryptocurrencies, is reshaping the whole Finance economy. With its characteristics of decentralization and immutability, it is leaving an everlasting impression on multiple business verticals -, especially the Insurance sector.

The technology is offering a number of effective solutions to the Insurance domain, such as – 

  1. Simplified process with the elimination of intermediaries,
  2. Enhanced risk management, 
  3. Reduced turnaround time for claim layouts,
  4. Better claim experiences, 
  5. Upgraded ‘KYC’ compliance, and more.

Because of these advantages, various insurance firms like Dynamis, Tierion, Everledger, and Safe Share have already invested in Blockchain app development. A recent addition to the list of insurance companies going the Blockchain route is Durr. 

Durr, a German-based mechanics and plant engineering firm, has obtained a loan of €750M ($840M) on a Blockchain-based sustainable syndicated loan platform. 

The company went into a deal with 13 popular banks from US, Europe and Asia for raising the fund amount. Some of the banks which participated were HSBC, DZ Bank, JPMorgan, and LBBW.

The thing that is more interesting about this deal is not the platform used, but the fact that the whole process is based on Blockchain. For example, the consortium process they will use will be based on Targens. The users participating in transactions will be creating digital identities that would be used for authorization of electronic signing of agreement and documentation. 

The digitization of the whole process will save the involved time and efforts and will make it possible for banks to lend money remotely.

“Digitization is a key element of our strategy, not just in view of our products and services but also in internal and external business processes,” said CFO Carlo Crosetto. “It was therefore important for us to use new digital technology in the syndication process, and to gain experience. We have thus reached a further milestone in digitizing our finance area.”

The deal will provide the company with €200M now and rest will be received when the company keeps its sustainability rating stable.

This rating score, which will be noted down by Ecovadis, will vary depending on various factors such as water consumption, working conditions, influence on the rate of return on loan, the extent of harm to nature, etc. 

 “We currently have a sustainability score of 51 points, which equates to a silver ranking at Ecovadis.” as disclosed by CFO Carlo Crosetto, “If we improve by 11 points, we would have reached the gold rank and the return would be 2 basis points cheaper. By contrast, if our sustainability score deteriorates by 11 points, the interest rate will increase accordingly.”

This is not the first time Durr has opted for sustainable-loan model in the field of Green Finance. The firm, two weeks back, introduced a €200M sustainability “Schuldschein” – a financing instrument to raise funds instead of  loans and bonds.But, what has been achieved this time is something that has made  both: the firm and the Insurance sector popular in the Blockchain market. It has encouraged other loan and insurance-based companies to go through relevant Blockchain application development guides looking at ways to embrace the technology.

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Bhupinder Kour
About The Author

Bhupinder Kour is the Content Writer at Appinventiv Technologies who loves to pen down her understanding and knowledge in simplified and engaging manner. She is an early adopter, likes to stay up to date with the latest trends in the mobile industry and add value to the organization. Besides this, she is fond of reading books, writing short stories and finding answers on Quora.You can connect with her on LinkedIn to know her views on mobile technology.

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