EFSE provides additional funding to develop small business sector in Southeast Europe

Ohrid, FYR Macedonia, June 09, 2010 – The European Fund for Southeast Europe (EFSE) announced loan agreements with six Southeast European financial institutions today during its annual meeting in Ohrid, FYR Macedonia. These institutions are Armenia’s Converse Bank, Azerbaijan’s Bank Respublika, Belarus’ Belgazprombank and Belarussian Bank for Small Business, Serbia’s Komercijalna Banka and Montenegro’s NLB Montenegrobanka.

The Fund is providing Converse Bank with a loan of USD 10 million, Bank Respublika of USD 5 million and Belarusian Bank for Small Business of EUR 5.4 million. The banks will use the proceeds of the EFSE loans to expand financing of investments and working capital of local micro and small enterprises (MSE). EFSE also agreed to provide Belgazprombank a loan of USD 30 million for on-lending to MSEs as well as to private households in the form of loans for house improvement, renovation, enlargement and purchase. The loans to Converse Bank, Bank Respublika, Belarusian Bank for Small Business and Belgazprombank are the first loans being provided under the European Small Business Growth Facility (ENBF), a dedicated European Neighbourhood window within the EFSE structure.

Furthermore, Komercijalna Banka is receiving a loan of EUR 20 million. The loan to Komercijalna Banka is the second EFSE has provided to the Bank for the purpose of refinancing loans to small businesses, following a similar EUR 20 million loan in May 2009. In addition, EFSE is providing another loan of EUR 5 million to NLB Montenegrobanka for small business lending. The current loan is the fourth loan the Bank has received from the Fund.

The funding made available by EFSE addresses the lack of suitable credit available to small business in Southeast Europe. As a result of the financial and economic crisis, the availability of particularly medium and long-term credit to businesses in the region has considerably declined, primarily impacting MSEs.

“Small businesses in Southeast Europe, including the European Eastern Neighbourhood region, are faced with many challenges in getting access to long-term financing at reasonable interest rates. These investments will facilitate small businesses access to finance, which is an important factor to bring the economies back on a growth track in the aftermath of the financial crisis”, said Dr. Klaus Glaubitt, Chairman of the Board of Directors of EFSE.

Overall, since its inception in December 2005 until December 2009, EFSE has offered a total of EUR 684 million in financing to commercial banks, small-business banks and microfinance institutions throughout Southeast Europe. These partner lending institutions have on-lent EUR 1.1 billion of EFSE funds in the form of roughly 216,000 business and housing loans.

“It is vital for the economies to ensure small businesses have access to credit lines. EFSE will do just that with the EUR 900 million of financing we plan to provide to financial institutions in Southeast Europe over the next five years to boost small business in the region. This will allow EFSE to facilitate EUR 2.3 billion in 350,000 new loans”, Dr. Glaubitt continued.

About the European Fund for Southeast Europe (EFSE)
The microfinance fund European Fund for Southeast Europe (EFSE) is aimed at fostering economic development and prosperity in Southeast Europe, including Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Bulgaria, FYR Macedonia, Georgia Kosovo, Moldova, Montenegro, Romania, Serbia and Ukraine. It offers long-term funding instruments to local financial institutions for on-lending loans to small business, in particular to micro and small enterprises (MSEs), as well as housing loans to low-income private households. The activities of EFSE are supported by the EFSE Development Facility, which provides funding for capacity building support to partner lending institutions, as well as awareness raising and market enabling activities. Initiated by KfW (The German Development Bank), the EFSE is a Public-Private Partnership that combines public funding and private investment. The investor base is comprised of donors and international financial institutions, including: European Commission, Federal German Ministry for Economic Development and Cooperation (BMZ), the governments of Austria, Switzerland, Denmark and Albania, KfW, IFC, FMO Netherlands Development Finance Company, European Bank for Reconstruction and Development (EBRD), European Investment Bank (EIB) and Oesterreichische Entwicklungsbank (OeEB). In addition, private investors such as Sal. Oppenheim and Deutsche Bank, contribute to the funding base. EFSE is a privately managed investment fund with Oppenheim Asset Management Services S.à r.l., Luxembourg, as the fund manager and Finance in Motion GmbH, Frankfurt/Main, Germany, as the fund advisor.

Media contact

European Fund for Southeast Europe  Mr. Samir Djikić, Communications Manager, EFSE Tel: +49 (0)69 / 977 876 50-26 E-mail: press@efse.lu