The European Bank for Reconstruction and Development (EBRD), a UK-based development finance institution established in 1991, is reviewing a proposal to invest EUR 25 million (USD 33 million) in the European Fund for Southeast Europe (EFSE), a Luxembourg-based investment company, to provide funding for micro-, small and medium-sized enterprises (MSMEs) in sixteen countries in Southeast Europe and neighboring countries. [1]
The investment will support EFSE in its provision of services such as lending to banks that provide on-lending to MSMEs. The new operation will also include a focus on local-currency lending. The EBRD board of directors will consider the proposal in July 2013.
As of 2012, EFSE has an outstanding investment portfolio of EUR 723 million (USD 885 million) and a total of EUR 834 million (USD 1.1 billion) in assets. The fund has disbursed EUR a total of 699.4 million (USD 923.6 million) in loans. In 2011, EBRD disbursed a total of EUR 6.7 billion (USD 8.3 billion).
By Meghan Gillis, Research Associate
About the European Fund for Southeast Europe (EFSE)
Established in 2005, the European Fund for Southeast Europe aims to foster economic development in southeastern Europe and parts of Central Asia by supporting the provision of financial services to low-income households and micro- and small enterprises via local financial institutions. EFSE was initiated by KfW Entwicklungsbank, a German development bank, with support from the German Federal Ministry for Economic Cooperation and Development (BMZ in German) and the European Commission. EFSE is privately managed, with Oppenheim Asset Management Services of Luxembourg acting as fund manager and Finance in Motion GmbH of Germany acting as fund advisor. As of March 2012, EFSE has an outstanding investment portfolio of EUR 723 million (USD 885 million) and a total of EUR 834 million (USD 1.1 billion) in assets . As of 2012, EFSE holds a label from LuxFLAG, an organization that certifies that microfinance investment vehicles actually invest in the microfinance sector.
About European Bank for Reconstruction and Development
The European Bank for Reconstruction and Development (EBRD) is a multilateral institution headquartered in London. The bank began operations in 1991 upon the agreement of 40 countries and is now owned by 61 countries as well as the European Investment Bank and the European Union. It aims to finance operations that are both commercially viable and assist development in 29 countries in Eastern Europe, Central Asia and North Africa. It does this by providing loans, debt securities, equity investments, guarantees and technical assistance to micro- and small businesses via commercial banks and non-bank microfinance institutions (MFIs). In 2011, EBRD disbursed a total of EUR 6.7 billion (USD 8.3 billion).
Sources and Additional Resources
[1] European Bank for Reconstruction and Development Story: “EFSE III A-Shares,” http://www.ebrd.com/pages/project/psd/2013/45057.shtml
MicroCapital story, May 13, 2013, “MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD), European Union Commit $25m to Kyrgyz Sustainable Energy Financing Facility (KyrSEFF),” https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-european-union-commit-25m-to-kyrgyz-sustainable-energy-financing-facility-kyrseff
MicroCapital story, March 8, 2013, “MICROCAPITAL BRIEF: EBRD Plans $200m to Expand Turkish Sustainable Energy Finance Facility (TurSEFF) for Small and Medium-sized Enterprises, Private Households,” https://www.microcapital.org/microcapital-brief-ebrd-plans-200m-to-expand-turkish-sustainable-energy-finance-facility-turseff-for-small-and-medium-sized-enterprises-private-households/
MicroCapital story, February 25, 2013, “MICROCAPITAL BRIEF: Minsk Transit Bank, Belgazprombank of Belarus Access $50m Facility for SME Energy Efficiency from European Bank for Reconstruction and Development,” https://www.microcapital.org/microcapital-brief-minsk-transit-bank-belgazprombank-of-belarus-access-50m-facility-for-sme-energy-efficiency-from-european-bank-for-reconstruction-and-development-erbd/
MicroCapital story, November 14, 2012, “MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) Lends $70m to Garanti Bank of Turkey, Hipotekarna Banka of Montenegro, Bai Tushum of Kyrgyz Republic,” https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-lends-70m-to-garanti-bank-of-turkey-hipotekarna-banka-of-montenegro-bai-tushum-of-kyrgyz-republic-2/
MicroCapital story, August 6, 2012, “MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) Extends Credit Line to Turkey’s Vakiflar Bankasi (Vakifbank) Worth $25m,” https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-extends-credit-line-to-turkeys-vakiflar-bankasi-vakifbank-worth-25m/
MicroCapital Universe Profile: European Bank for Reconstruction and Development (EBRD)
MicroCapital Universe Profile: European Fund for Southeast Europe (EFSE)
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