EFSE ready to invest EUR 50 million in Serbia during 2009

Total new investments for Southeast Europe amount to EUR 200 million

Investments to support the micro and small enterprise sector

European Commission steps up its financial support to EFSE with another EUR 10 million during 2009

EFSE Annual Meeting 2009 will be held from May 26-28 in Novi Sad, Serbia. Discussions will focus on mitigating strategies for alleviating the effects of the international financial crisis on Southeast Europe

Belgrade, May 26, 2009 – The European Fund for Southeast Europe (EFSE or the Fund), one of the world’s largest microfinance investment funds, announced its plans to invest EUR 50 million in Serbia during 2009 to help local entrepreneurs gain access to finance in order to build new or expand upon existing businesses. The investment comes as part of an overall plan to invest a total of EUR 200 million in the Fund’s target region of Southeast Europe (the Region) during 2009. Investments will consist of long-term refinancing facilities granted to local financial institutions to enable them to on-lend finance to micro and small enterprises (MSEs).

Dr. Klaus Glaubitt, Chairman of the Board of Directors of EFSE, and Head of the Competence Center for Financial Sector Promotion at KfW Entwicklungsbank, the founder and lead investor of EFSE, said: “These numbers confirm EFSE’s commitment to foster economic development and prosperity as well as to contribute to the creation of employment in Serbia and the region of Southeast Europe as a whole. As the crisis spreads across Southeast Europe, it is crucial that financial support is made available – in particular to micro enterprises and small businesses. We enjoy strong support from our investors, including the Federal German Ministry for Economic Cooperation and Development (BMZ) and European Commission. Together we are ready to share this responsibility by investing more than we have ever done before.”

European Commission steps up its financial support to EFSE with another EUR 10 million
Mr. Timo Summa, Director in Directorate General Enlargement of the European Commission, who along with BMZ is also one of EFSE’s key supporters, commented, “In times of financial and economic distress, continued access to finance for small businesses is essential. The private sector is the backbone of the economies of Southeast Europe and its continued development is crucial for the candidate and potential candidate countries’ preparations for European Union membership. As a signal of solidarity the European Commission has therefore announced the delivery of a Crisis Response Package of some EUR 150 million in November 2008 for delivery as from 2009. EFSE is one of the main pillars of this Package. As a result, the European Commission, which currently invests in EFSE with some EUR 83 million, will step up its financial support to the Fund with another EUR 10 million before the end of 2009. The European Union is strongly committed to fostering peace and stability in Southeast Europe, an essential overall European interest in times of global financial and economic crisis.”

Appreciating EFSE’s significant contribution to the development of the Serbian financial sector, the Governor of the National Bank of Serbia and member of EFSE’s Advisory Group, Dr. Radovan Jelašić said, “We see EFSE as an important instrument for the development of the financial sector in Serbia.  It helps micro and small enterprises get access to long-term loans through partner banks, thereby generating employment and income. Moreover, the Advisory Group of the Fund, which involves representatives of the Central Banks of the Region, is a crucial vehicle to strengthen integration and cooperation in Southeast Europe, which in these current times of turmoil is more important than ever.”

Total investments in Serbia amount to EUR 80 million
EFSE’s total investments in the Region amount to EUR 529 million (as of December 2008), with the Serbia portfolio comprising EUR 80 million. These consist of long-term refinancing facilities provided to 55 local financial institutions (partner lending institutions) in the Region, 7 of which are located in Serbia. Partner lending institutions include commercial banks, microcredit organisations, non-bank financial institutions and specialised MSE banks, such as the Southeast European member banks of the ProCredit network. EFSE’s investments have helped partner lending institutions refinance more than 150,000 loans to MSEs and private households, more than 20,000 loans in Serbia alone, contributing to the creation of 245,000 jobs (EFSE Annual Development Impact Study). 

The average loan amount refinanced by EFSE is less than EUR 5,000, which is evidence of the Fund’s mission to reach out to micro entrepreneurs and low-income households.

Third EFSE Annual Meeting takes place in Novi Sad, Serbia
As another mark of EFSE’s long-term commitment to Serbia, the Fund will hold its third Annual Meeting from 26-28 May, 2009 in Novi Sad, Serbia. The Annual Meeting will host over 200 guests of the Fund’s stakeholders, including donors, international finance institutions, private investors, commercial banks and microfinance institutions, as well as policymakers, academics and other experts in related fields. The theme of this year’s event covers mitigating strategies for alleviating the effects of the international financial crisis on Southeast Europe and the future outlook for the financial sector in this region. 

Featured speakers and panellists include Mr. Timo Summa, Director in Directorate General Enlargement of the European Commission, Dr. Leo Kreuz, Head of the division for South-East Europe from BMZ, Prof. Dr. Norbert Walter, Chief Economist at Deutsche Bank AG, and Ms. Doris Köhn, Senior Vice President at KfW.

Besides the conference, the Fund will host a meeting with its Advisory Group. It is comprised of representatives of Central Banks in the target region. The Advisory Group provides EFSE’s fund management with an important tool and information source to stay abreast of financial sector developments in the region from a policy maker’s perspective. As such, it provides a platform for regional coordination, which the Fund seeks to promote. 

About the European Fund for Southeast Europe
Aimed at fostering economic development and prosperity in Southeast Europe, EFSE offers long-term funding instruments to local financial institutions for on-lending to micro and small enterprises as well as to low-income private households. Established by KfW Entwicklungsbank in December 2005 as a Public-Private Partnership, the Fund exhibits a strong investor base of donors, international finance institutions and private institutional investors, including: European Commission, Federal German Ministry for Economic Development and Cooperation (BMZ), Swiss Agency for Development and Cooperation (SDC), Austrian Development Agency (ADA), Danish International Development Agency (DANIDA), the Government of the Republic of Albania, KfW Entwicklungsbank, IFC International Finance Corporation, EBRD European Bank for Reconstruction and Development, FMO Netherlands Development Bank, EIB European Investment Bank, OeEB Oesterreichische Entwicklungsbank, Sal. Oppenheim, Crédit Coopératif and Deutsche Bank. Besides the investment fund, EFSE has a Development Facility. By giving grants, it funds technical consulting and training measures to institutionally strengthen the partner finance institutions. The Fund manager of EFSE is Oppenheim Asset Management Services, Luxembourg.

Media contacts

EFSE Mr. Samir Djikić, Communications Manager Tel: +49 (0)69 9778 7650-26 E-mail: press@efse.lu