MICROCAPTIAL BRIEF: European Fund for Southeast Europe (EFSE) Loans $9.6m to NLB Razvojna Banka for Micro- and Small Enterprise (MSE) Lending

The European Fund for Southeast Europe (EFSE), a microfinance investment fund, recently loaned EUR 7 million (the equivalent of USD 9.6 million) to NLB Razvojna banka, a financial institution in Bosnia and Herzegovina.

The loan is intended to spur financing to micro- and small enterprises (MSEs) in Bosnia and Herzegovina in the midst of a slowdown of lending activity due to the global financial crisis. In an EFSE press release, EFSE’s Chief Operating Officer, Sylvia Wisniwski, said that the loan “will enable NLB Razvojna banka to create financial opportunities for approximately 500 micro-entrepreneurs” [1]. As of June 2007, NLB Razvojna banka has BAM 1.1 billion (the equivalent of USD 800 million) in assets. NLB Razvojna banka is a member of the NLB Group, an international Slovenian financial group with assets totaling EUR 19.8 billion (the equivalent of USD 27.1 billion) [2, 3].

About the European Fund for Southeast Europe:

The European Fund for Southeast Europe (EFSE) is a microfinance fund with the goal of fostering economic development in Southeast Europe. It was founded in December 2005 and has facilitated approximately 200,000 loans to micro- and small enterprises (MSEs) and private households. EFSE also runs a Development Facility that provides technical consulting and training measures to strengthen partner finance institutions. According to the Microfinance Information Exchange (MIX), the fund’s assets total over USD 716 million [4].

About NLB Razvojna banka:

NLB Razvojna banka began operating on April 1, 2006. Its headquarters are in the Republic of Srpska within Bosnia and Herzegovina. In June 2007, the bank reported a balance of BAM 1.1 billion (the equivalent of USD 800 million) [3]. NLB Razvojna banka provides financial services to retail clients, corporate clients, and small and medium-sized enterprises [2]. NLB Razvogna banka does not report to the Microfinance Information Exchange (MIX).

By Eric McKay, Research Assistant

Bibliography:

[1] European Fund for Southeast Europe (EFSE) Press Release: “EFSE disburses loan to NLB Razvojna banka for micro and small enterprise lending”, http://www.efse.lu/news-events/press-releases/archive/press-releases-2010-01-18.html

[2] NLB Razvojna banka: “About Us”, http://www.razvojnabanka.com/AboutBank/Historyofbank/tabid/213/Default.aspx

[3] NLB Razvojna banka: “Financial statement for the period January-June 2007”, http://www.razvojnabanka.com/LinkClick.aspx?link=Dokumenti%2fobjavljivanje_polugodsnji.2007-engleski.pdf&tabid=213&mid=57

[4] Mix Market: EFSE, http://www.mixmarket.org/funders/efse

Additional Links:

MicroCapital Universe: European Fund for Southeast Europe: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=European+Fund+for+Southeast+Europe+%28EFSE%29

MicroCapital Universe: NLB Razvojna banka: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=NLB+Razvojna+banka