MICROCAPITAL BRIEF: EFSE Loans $33m to Erste Bank Montenegro for Housing Microfinance

The European Fund for Southeast Europe (EFSE), a microfinance investment vehicle domiciled in Luxembourg, recently announced it has lent EUR 30 million (USD 33 million) to Erste Bank Montenegro, a commercial banking member of the Austria-based Erste Group, to expand housing finance in Montenegro. Erste Bank Montenegro CEO Aleksa Lukic commented, “This credit line will support numerous families in Montenegro in fulfilling their aspirations and resolving one of the major priorities in life – quality living space – whilst buying or renovating their homes under favourable conditions.”

Based in Podgorica and established in 2002, Erste Bank Montenegro has total assets of EUR 520 million (USD 573 million), net annual income of EUR 10.2 million (USD 11.2 million) and 15 branches as of 2018. Founded in 1819, Erste Group has been publicly traded since 1997. It serves approximately 16.1 million customers via 2,577 branches in Austria, Croatia, the Czech Republic, Hungary, Moldova, Montenegro, Romania, Serbia and Slovakia. As of July 2018, Erste Group reports total assets of EUR 248 billion (USD 273 billion), customer deposits of EUR 170 billion (USD 187 billion), and loans and other receivables from customers of EUR 155 billion (USD 171 billion).

German development bank Kreditanstalt fur Wiederaufbau (KfW) founded EFSE in 2005 with assistance from the European Commission and the German Federal Ministry for Economic Cooperation and Development (also known by its German acronym BMZ). As of January 2019, EFSE has EUR 867 million (USD 973 million) outstanding to retail lenders, which have on-lent those funds to 134,000 end-borrowers in the following countries: Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Georgia, Kosovo, Moldova, Montenegro, North Macedonia, Romania, Serbia, Turkey and the Ukraine. As of 2019, the fund holds a microfinance label from the Luxembourg Fund Labeling Agency (LuxFLAG), an NGO that certifies that social investment vehicles actually invest as advertised.

By Eugene DeCosse, Research Associate

Sources and Additional Resources

EFSE press release
https://www.efse.lu/news-events/news/detail/efse-expands-access-to-housing-finance-in-montenegro/

Erste Bank Montenegro homepage
https://www.erstebank.me/sr_ME/stanovnistvo

Erste Group 2019 H1 Report
https://www.erstegroup.com/en/news-media/press-releases/2019/07/31/erstegroup-h12019-results

EFSE homepage
https://www.efse.lu/

EFSE financial statements
https://www.efse.lu/about-the-fund/facts-and-figures/

MICROCAPITAL BRIEF: European Fund for Southeast Europe (EFSE) Loans $2.6m in Local Currency to VisionFund Microfinance Institution SEF International to Support Rural MSEs in Armenia
https://www.microcapital.org/microcapital-brief-european-fund-for-southeast-europe-efse-loans-2-6m-in-local-currency-to-visionfund-microfinance-institution-sef-international-to-support-rural-mses-in-armenia/

MICROCAPITAL BRIEF: EBRD Loans $5.9m in Local Currency to Erste Bank ad Novi Sad to Support Household Energy Efficiency in Serbia
https://www.microcapital.org/microcapital-brief-ebrd-loans-5-9m-in-local-currency-to-erste-bank-ad-novi-sad-to-support-household-energy-efficiency-in-serbia/

TheBanks profile on Erste Bank Montenegro
https://thebanks.eu/banks/18455

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