Just like with EUR and/or USD investments on our platform, as an investor, you risk losing your deposit when an entrepreneur defaults. The intervention of TCX and KfW, the German development bank, does not minimize or eliminate this risk.
TCX hedges the exchange rate risk on the local currency projects to make sure potential fluctuations and depreciation in the entrepreneur’s local currency against the euro don;t result in losses for the investor or the entrepreneur. KfW minimizes the risk TCX takes by guaranteeing potential credit losses on the currency exchange in case an entrepreneur defaults. In case of a default the KfW will pay the credit loss on the currency exchange to TCX. To make this possible, KfW is financially supported by the German Ministry of Environment, BMU.