Decent and fairly paid work not only provides the chance to escape a life of poverty and misery, it also contributes to social recognition and inclusion. However, according to the World Bank, nearly 700 million people still live on less than USD 2.15 per day – despite, in many cases, working for a living. Working relationships in poorer rural areas are often subject to exploitation, forced and child labour, and hazardous working conditions. Often people can just about scrape by on these incomes but not live in dignity.

KfW is working to counteract this in many ways, such as in Bangladesh, where poor working conditions in the textile industry have repeatedly made headlines – the nadir being the tragic collapse of the Rana Plaza commercial building in 2013. The production of cheap clothing was often to the detriment of occupational safety and the environment. This is now set to change. On behalf of the German Federal Government, KfW is participating in a European financing consortium that is making available over EUR 50 million in funds, largely as loans for social and environmental investments in the country’s textile industry. Specific developments include installing and signposting emergency exits and providing water and pumps for extinguishing fires. The measures to receive funding also include nurseries for workers' children, along with solar power and wastewater treatment plants.

In Africa, KfW launched the Invest for Jobs on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ). The initiative aims to work with companies to create decent jobs and improve working conditions and social security in eight African countries. It currently finances more than 50 investment projects in Egypt, Ethiopia, Côte d'Ivoire, Ghana, Morocco, Rwanda, Senegal and Tunisia. The initiative has already created more than 90,000 jobs.

All KfW measures comply with international labour and social standards. This is an important prerequisite for employment to take place under decent working conditions and be socially sustainable.

In many countries in the Global South, young people cannot find a job even after they have completed their education. This is often the case despite the fact that there is a shortage of workers in companies. The reason for this disparity is that youth either have no training at all or that training does not give them what employers are looking for.

KfW therefore promotes vocational training that provides practical skills for the labour market, such as in Lebanon. Here, some young people learn basic skills such as reading and arithmetic and other work-related skills, preparing for employment or starting their own small business. This can be knowledge of road construction, sanitation or simple electrical work. The training also covers English, computer skills and financial knowledge. To date, the project has reached more than 100,000 young people, of whom more than half are women and refugees.

In the Western Balkans, KfW is promoting training at vocational schools that is aligned with the needs of the economy on behalf of the BMZ through the Regional Challenge Fund. The provision of training works in a similar manner to the German dual work/education system and is primarily based on close cooperation with private enterprises. The fund supports consortia comprising state-approved vocational schools and private enterprises, including German firms. The interest in funds from the programme is overwhelming. More than 600 vocational training institutions with over 2,500 companies have already applied for RCF financing. To date, 99 projects have been selected and funded.

Similarly, KfW supports practical training in Africa through the “Skills Initiative for Africa”. At the heart of this initiative is a financing facility based at the African Union Development Agency, which funds projects focused on employment in eight countries. Both public and private organisations and non-governmental organisations are eligible to apply for funding from this scheme. KfW likewise supports vocational training programmes in many other countries at national level, such as Egypt and Ethiopia. The aim is always to increase the employment prospects of young people.

Empirical data shows that in developing countries, small and medium-sized enterprises (SMEs) are responsible for more than 60 percent of all new jobs that are created. Studies also show that the more SMEs that are present in a country, the higher the per capita income proves to be. However, one of the biggest barriers to investment for SMEs remains the lack of access to financial services tailored to their specific needs.

This is where KfW Development Bank comes in with its financial projects. These strengthen local financial institutions and thus improve access to financial services for SMEs, for example through refinancing lines, equity investments or guarantees. Businesses run by women in particular benefit from these measures. Poorer households also benefit from sound financial systems because they are able to open savings accounts, take out micro-loans, take out insurance policies and participate in the movement of money. Examples include projects in Rwanda, where growth and export-oriented SMEs receive loans, and Ghana. There, too, SMEs receive loans tailored to their needs through the development bank established in 2020 based on the KfW model.

In addition to traditional financial sector projects, KfW now also offers direct corporate financing via funds. This makes sense if the financial sector does not have stable structures locally or the target group does not receive suitable financing due to high risks. Some funds in which KfW participates particularly support the social side of economic activity. This is the case, for example, with the Aavishkaar Social Entrepreneurship Fund in India. This fund promotes social enterprises through equity or technical support from the fund manager.

Funds have the advantage of pooling resources from several donors. In addition to KfW, other development banks typically invest in these funds, and private investors are often involved as well. KfW often acts as anchor investor, thereby reducing the risk for other investors. This is particularly important for the private sector, which might otherwise not invest in difficult markets such as those found in various countries in the Global South. This allows KfW to leverage much higher sums than state organisations would be able to raise alone. This benefits the local countries, while also being attractive to the private sector in the Global North.

As women in particular face challenges in the financial markets, KfW also provides targeted support for them. Examples include the two funds managed by the non-profit organisation Women’s World Banking (WWB), to which KfW has contributed. The core concern here is to give women access to financial services so that they can become more economically independent and start or expand businesses. Millions of women have already gained access to loans, savings accounts and insurance thanks to WWB.

The fund’s instrument has also proven its worth in crises. The Business Development Fund (BDF) in Ukraine helped to prevent the nation's economy from collapsing during Russia's war of aggression and ensure it remained functional. In this context it was decided in 2025 to establish a European fund for reconstruction in Ukraine. It is set to commence with its investment activities in 2026, paving the way for private enterprises, including those from Germany, to enter the Ukrainian market. Its volume is expected to reach 1 billion euros.

Part of KfW’s work focuses on the financing of infrastructure. This includes sustainable power plants in Côte d'Ivoire, electricity grids in India, roads and rural routes in Cambodia, ports, bridges, and hospitals, health stations and schools, for example in Honduras. Infrastructure is the backbone of every economy. Without it, there is no energy, no links to markets, no training for young people and no care for sick people. In this respect, intact infrastructure per se contributes to development and economic growth.

Such investments also have a direct impact on the labour market. Building infrastructure requires a lot of manpower. KfW ensures that its projects primarily employ people who live in the region, while also taking into account international standards for decent work. This also sets an example for local companies. Where KfW is involved, infrastructure measures usually also include further training for staff who maintain and operate the facilities in the long term. This creates knowledge and skills and greater sustainability for the newly constructed infrastructure.

In particularly poor regions, refugee camps or crisis-hit areas, KfW supports measures according to the “cash for work” principle. In these cases, labour-intensive activities such as the construction of canals are rewarded with cash in order to immediately alleviate extreme poverty. Typically, as many people as possible are employed for a limited period of time rather than fewer for a longer period, so that many families benefit from a cash flow (albeit temporary). This also helps to increase the acceptance of refugees in the host communities. In Mosul (Iraq), for example, returning families are closely involved in the reconstruction of their city, thereby earning a temporary income.

In particular, local communities and residents benefit directly from KfW’s infrastructure initiatives. However, these projects also benefit German and European companies, who find it easier to operate and invest in markets in the Global South if there are good transport systems, a sufficient electricity supply, adequate healthcare and well-educated people.