Financial expert warns: Repayment of Corona aid is putting the self-employed in financial distress

Financial expert warns: Repayment of Corona aid is putting the self-employed in financial distress

According to a report by www.berliner-zeitung.de, debt advice centers in Berlin have recorded a significant increase in requests for advice in recent weeks. The main reason for this is the repayment of Corona aid for the self-employed, which some cannot afford, leading many of them into bankruptcy. According to Rundfunk Berlin-Brandenburg (RBB), 40 percent more requests for advice were recently registered, and by October, debt advice had already accompanied 100 insolvencies through to court, which is significantly more than in the whole of last year.

Micro-entrepreneurs and self-employed people who cannot repay the Corona aid payments are particularly affected by the repayment problem. This is explained, among other things, by the fact that the costs of energy and life support have risen sharply since the pandemic aid was paid out. The Investitionsbank Berlin (IBB) announced that by the end of October, refund claims totaling almost 150 million euros had been issued for almost 20,000 applications, of which only around 24 million euros had been repaid so far.

Applicants must submit a final invoice by March 31, 2024, otherwise the aid funds will be reclaimed by IBB. It is necessary to provide evidence of what the funds were used for and whether they were actually needed in the amount paid out.

This development may have an impact on the financial market and the financial industry as a whole, as the insolvency of many self-employed people and small businesses could lead to an increased insolvency rate. In addition, the discrepancy between the aid money paid out and the actual needs of the applicants could indicate irregularities in the distribution of Corona aid.

It is therefore urgent that the government and financial institutions take measures to support those experiencing financial difficulties and to ensure that coronavirus aid is allocated appropriately and transparently.