MICROCAPITAL BRIEF: European Fund for Southeast Europe (EFSE) to Loan $5.5m to Nova Ljubljanska Banka (NLB) d.d. Sarajevo to Increase Housing Finance Access

The European Fund for Southeast Europe (EFSE), a Luxembourg-based microfinance investment vehicle (MIV), recently announced that it will loan EUR 5 million (USD 5.5 million) to Nova Ljubljanska Banka (NLB) d.d. Sarajevo, which is controlled by Slovenian finance firm NLB Group, to enable younger and lower-income households in Bosnia and Herzegovina to acquire housing.

Senad Redži, the director of NLB d.d., Sarajevo said “We have successfully cooperated with the EFSE for years in providing the best credit lines to micro-, small and medium enterprises. The EFSE’s latest loan underscores the strength of our cooperation as well as the fact that we share the same goals in supporting the Bosnia and Herzegovina economy. We are proud to now be in a position to offer housing loans with fixed interest rates that guarantee long-time stability in terms of repayments costs for households and young individuals”.

As of December 2014, EFSE reported total assets of EUR 1 billion (USD 1.1 billion) and a gross loan portfolio of EUR 940.5 million (approximately USD 1 billion). As of December 2014, NLB d.d., of which NLB d.d. Sarajevo is part, reported total assets of USD 8.9 billion, return on assets (ROA) of 0.9 percent and return on equity (ROE) 7.2 percent. As of the same date, NLB Group, the parent company of NLB d.d., reported total assets of USD 11.9 billion, ROA 0.6 percent and ROE 5.2 percent. NLB d.d. Sarajevo’s numbers were not available.

By Kevin van den Brink, Research Associate

About European Fund for Southeast Europe

The Luxembourg-based European Fund for Southeast Europe (EFSE) focuses on the development of local financial sectors in Southeast Europe and parts of Central Asia by providing “long-term” funding for micro- and small enterprises as well as private households via partner retail institutions. EFSE also operates the EFSE Development Facility, which provides technical assistance, consulting and training services to support capacity building within these partner institutions. EFSE was established in 2005 by German Development Bank Kreditanstalt für Wiederaufbau (KfW), with the financial support of the German Federal Ministry for Economic Cooperation and Development (which is also known by its German acronym BMZ) and the EU’s European Commission. The fund 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. EFSE operates in 16 countries: Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Georgia, Kosovo, Moldova, Montenegro, Romania, Serbia, Ukraine, Turkey and the former Yugoslav Republic of Macedonia. As of 2014, EFSE reported a gross loan portfolio of EUR 940.5 million (approximately USD 1 billion). As of 2015, EFSE holds a microfinance label from Luxembourg Fund Labeling Agency (LuxFLAG), an NGO that certifies that social investment vehicles actually invest as advertised.

About Nova Ljubljanska Banka (NLB) d.d. Sarajevo

NLB Bank d.d. Sarajevo provides banking services to retail and corporate clients as well as development projects in the capital region of Bosnia and Herzegovina. The bank is a member of NLB d.d., which is a member of the NLB Group, a Slovenian finance group comprising 45 members operating in 13 European countries. As of December 2014, NLB Group reported total assets of USD 11.9 billion, return on assets (ROA) 0.6 percent and return on equity (ROE) 5.2 percent.

Sources and Additional Resources

[1] EFSE, News, “EFSE and NLB Banka d.d. Sarajevo renew partnership to enhance access to housing finance”

MicroCapital Universe Profile: EFSE

MicroCapital Universe Profile: NLB Banka d.d. Sarajevo

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