The European Fund for Southeast Europe (EFSE), a Luxembourg-domiciled microfinance investment vehicle, recently issued a loan of USD 10 million to OTP Leasing, which is a unit of OTP Bank JSC, a Ukraine-based member of the Hungary-based OTP Group. The loan is intended to “enhance access to longer-term fixed assets financing for rural and agricultural micro- and small enterprises (MSEs)…”.
Founded in 2008, OTP Leasing is based in the city of Kiev and provides leasing services for machinery, equipment and vehicles. The company’s portfolio at the end of 2018 amounted to UAH 6.5 billion (USD 240 million), with a market share of approximately 40 percent, based on value of leased assets.
OTP Group, a banking group that grew from Hungary’s Orszagos Takarekpenztar (OTP), reports total assets of HUF 14.6 trillion (USD 51 billion), return on assets of 2.3 percent and return on equity of 19 percent as of December 2018. The group operates 1,400 branches, 4,300 automated teller machines and 113,000 other service points in Eastern and Southeastern Europe.
German development bank Kreditanstalt fur Wiederaufbau (KfW) founded EFSE in 2005 with the assistance of the German Federal Ministry for Economic Cooperation and Development (also known by its German acronym BMZ) and the European Commission. As of January 2019, the fund has EUR 897 million (USD 1.0 billion) outstanding to retail lenders, which on-lend those funds to 140,000 end-borrowers in the following countries: Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, the Republic of North Macedonia, Georgia, Kosovo, Moldova, Montenegro, Romania, Serbia, the Ukraine and Turkey. As of 2019, EFSE holds a microfinance label from the Luxembourg Fund Labeling Agency (LuxFLAG), an NGO that certifies that social investment vehicles actually invest as advertised.
By Daena McClintock, Research Associate
Sources and Additional Resources
EFSE press release
https://www.efse.lu/news-events/detail/efse-provides-its-first-loan-to-the-ukrainian-leasing-sector/
EFSE website
https://www.efse.lu/
OTP Leasing (Ukraine) website
https://www.otpleasing.com.ua/
LuxFLAG webpage
https://www.luxflag.org/
Finance in Motion
http://www.finance-in-motion.com
MICROCAPITAL BRIEF: ACBA-Credit Agricole Bank Borrows $10m in Local Currency from European Fund for Southeast Europe (EFSE) to Finance Micro-, Small Enterprises (MSEs) in Armenia
https://www.microcapital.org/microfinance-brief-acba-credit-agricole-bank-borrows-10m-in-local-currency-from-european-fund-for-southeast-europe-efse-to-finance-micro-small-enterprises-mses-in-armenia/
MICROCAPITAL BRIEF: EBRD Sells 9% Equity Stake in Mobiasbanca of Moldova for $2.9m as Societe Generale Sells Majority Stake to OTP
https://www.microcapital.org/microcapital-brief-ebrd-sells-9-equity-stake-in-mobiasbanca-of-moldova-for-2-9m-as-societe-generale-sells-majority-stake-to-otp/
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