History

The European Fund for Southeast Europe’s story started with an idea to support the re-development of the war-battered region of Southeast Europe. This idea included the creation of partnerships where public donors would work with private investors to establish a microfinance investment fund. This fund would have an innovative structure and would combine the development of social standards with financial performance goals.

EFSE is the successor of various development finance initiatives known as the "European Funds for Bosnia and Herzegovina, Kosovo, Montenegro and Serbia" that were implemented in 1998 as a post-conflict reconstruction effort in Southeast Europe. These initiatives provided long-term funds to local financial institutions in the region for on-lending to micro and small enterprises and private households complemented with technical assistance programmes. The Funds received support from the European Union, various European governments and from the Netherlands Development Finance Company (FMO). Manager of these funds was KfW Entwicklungsbank.

An important milestone was the successful transfer of existing refinancing programmes to EFSE. The preceding European Funds were merged in one new Fund. EFSE was established in 2005 with KfW Entwicklungsbank as the Initiator under the laws of the Grand Duchy of Luxembourg as a "SICAV" together with a regional funding facility for Albania, Bulgaria, FYR Macedonia, Moldova and Romania. At the Fund’s inception, the primary funding base was comprised of donor contributions from the European Union, the German, Swiss and Austrian governments as the main sponsors of the preceeding European Funds.

Achievements