EFSE provides EUR 20 million loan to Serbia's Komercijalna Banka

EFSE’s largest investment in Serbia so far to boost micro and small enterprise sector

EFSE’s total investments in Serbia reach EUR 100 million milestone

Frankfurt am Main and Belgrade, May 27, 2009 – One of the world’s largest microfinance investment funds, the European Fund for Southeast Europe (EFSE), and Komercijalna Banka AD Beograd, Serbia, announced today a loan agreement of EUR 20 million, which EFSE will lend on to the Bank. The loan enables Komercijalna Banka to further expand its outreach to micro and small enterprises in Serbia. The loan represents EFSE’s largest single senior loan in Serbia to date and the first of which it has granted to Komercijalna Banka.

Komercijalna Banka is amongst Serbia’s largest banks by capital. With more than 270 branches and outlets, it has the largest network in the country and significant potential to further develop its retail and micro as well as small and medium enterprise banking operations in particular.

The loan agreement has been signed between EFSE and Komercijalna Banka representatives during today’s EFSE’s 3rd Annual Meeting, currently taking place in Novi Sad, Serbia. The signatories included: Mr. Franz-Josef Flosbach, Member of the Board of Directors of EFSE and Head of Department, Europe/Middle East/Central Asia of DEG, Michael Neumayr, Member of the Board of Directors of EFSE and Executive Director of EBRD, Mr. Dragan S. Santovac, Deputy President of the Executive Board of Komercijalna Banka, and Ms. Slavica Djordjevic, Executive Board Member of Komercijalna Banka.

“Komercijalna Banka plays a crucial role in Serbia’s banking sector and sees a high potential in reaching micro and small enterprises. That is why we consider this partnership especially important”, said Dr. Klaus Glaubitt, Chairman of the Board of Directors of EFSE, during the signing ceremony. “Moreover, the loan to Komercijalna Banka will lead to the increased availability of finance to micro and small enterprises, which are the heart of Serbia’s economy. The difficult economic conditions make the loan more important and timely than ever. We are confident that the loan will enable and promote private entrepreneurship in Serbia for the benefit of the whole economy.”

Dragan Santovac, Deputy Chairman of the Executive Board at Komercijalna Banka said: „We have signed this contract today believing that we have made an excellent arrangement, not just for EFSE and Komercijalna banka and their increased market share in Serbia, but above all for our clients – micro and small enterprises - a major part of our client base. These funds will enable the Bank to financially support the development plans of our small sized but otherwise extremely important clients, under terms individually suited to their potential and current economic situation in which they operate. The effects of the cooperation with an internationally acknowleged fund will not only be measured by an increase in the number of bank clients but also in the multiply sinergy effect on our immediate business sorroundings, their partners and finally on the bank. Therefore, I believe that this contract is just the first step towards a succesful cooperation.“

EFSE’s total investments in Serbia reach EUR 100 million milestone
With the recent loan to Komercijalna Banka, EFSE’s total investment portfolio in the target region of Southeast Europe (Region) rises to EUR 551 million, and in Serbia to approximately EUR 100 million. These investments consist of long-term refinancing facilities granted to 55 local financial institutions (partner lending institutions) in the Region, 7 of which are located in Serbia. Partner lending institutions include commercial banks, specialised MSE banks, microcredit organisations and non-bank financial institutions, such as leasing companies.

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 245,0001 jobs in the region.

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.

About the European Fund for Southeast Europe (EFSE):
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. Fund manager is Oppenheim Asset Management Services, Luxembourg.

About Komercijalna Banka AD:
Over 38 years, Komercijalna Banka has represented a strong, recognisable and respectable financial institution which has positioned itself on the very top of the banking activity in the region.

Today, our Bank is the leader of the Serbian financial market in many ways. With its extended network of representative offices (25 branches and 270 sub-branches in Serbia), the Bank has efficiently and effectively offered a first-class, complete banking service and products to more than 700,000 clients, both in the country and abroad. The Bank is also the 100% owner of Komercijalna Banka a.d. Budva, with its network of 15 branches throughout Montenegro, as well as of  Banja Luka Bank, which has 16 branches and agencies within its network.

Komercijalna Banka enjoys the highest confidence of citizens; they rate our Bank as the best in the country – this is the result of repeated public opinion researches that cover banks and their services, realised by specialised, independent research agencies. However, the confidence which Komercijalna Banka enjoys among the citizens is even better illustrated by the fact that according to the level of F/X savings, the Bank has enjoyed a leading position in Serbia for years.

Numerous credit programmes intended for the financing of not only big corporate entities, but also small and medium enterprises, make Komercijalna Banka the strong pillar of Serbian industry and economy.

2008 was marked by the increase of operating efficiency, the implementation of modern and functional core software, an improvement in the organisation and application of the most contemporary banking management and service rendering procedures, as well as a growth in client satisfaction and a stable market share of almost 10%.

Komercijalna Banka is the Custody Bank for several funds, and it has founded the KomBank Invest Investment Fund.

The Bank offers an abundant pallet of payment and credit cards from national and international programmes, for example: Dina, Visa and MasterCard, which it expanded by Dina payment card for farmers – Kombank Agrar and the premium product – Visa Platinum card, which is issued by only 90 banks in the world.

Komercijalna banka operates under the international quality standard BSI ISO 9001:2000.

Media contacts

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

Komercijalna Banka Ms. Jugoslava Smiljković, Director Tel: +381 (0)11 30 80 220 E-mail: jugoslavas@kombank.com