EFSE signs loan agreement with Mikrofin in Bosnia and Herzegovina

Tirana (Albania) and Banja Luka (Bosnia and Herzegovina), 7 June 2011 – The European Fund for Southeast Europe (EFSE) – initiated by KfW Entwicklungsbank (The German Development Bank) with the financial support of the German Federal Ministry for Economic Cooperation and Development (BMZ) and the European Commission – signed a new loan agreement to provide EUR 4 million to support the micro enterprise lending of the Micro Credit Company Mikrofin (“Mikrofin”) in Bosnia and Herzegovina. The loan agreement was signed at the EFSE’s Annual Meeting in Tirana, Albania, today.

The EFSE’s credit facility will strengthen Mikrofin’s funding base and ensure continuous provision of credit services to a large number of micro enterprises throughout Bosnia and Herzegovina.

Mikrofin focuses on the lower income segment of micro and small enterprises, in both urban and rural areas of Bosnia and Herzegovina, and the new funding will allow this long-standing partner of the EFSE to increase its core client base of micro entrepreneurs. The EFSE’s credit facility will allow Mikrofin to finance approximately 1,000 additional micro loans.

“The EFSE is pleased to continue supporting the development of the private sector in Bosnia and Herzegovina by providing much-needed financing for micro entrepreneurs. This transaction also sends a strong signal of confidence in Bosnia and Herzegovina’s microfinance sector, especially in view of the transformation it is undergoing”, said Dr. Klaus Glaubitt, Chairman of the Board of Directors of the EFSE. “The EFSE’s is pleased to support a well-established Institution that plays such an important role, both in Bosnia and Herzegovina’s economy and in the transformation of its microfinance sector. We look forward to continuing our cooperation with our long-term partner Mikrofin and supporting the Institution in its ability to continue financing micro enterprises”, he added.

“Mikrofin is delighted to continue its long term and successful cooperation with EFSE. This new loan will enable Mikrofin to continue its lending activities all over Bosnia and Herzegovina, and to provide new loans to micro and small entrepreneurs. The signing of the new loan agreement with Mikrofin confirms the EFSE’s intent to continue to be one of the most important partners of the microfinance sector in Bosnia and Herzegovina and to be proactive in finding the appropriate solutions for the future development of the sector”, said Mrs Radmila Bjeljac, Director of MCC Mikrofin, Banja Luka.

The EFSE is the largest provider of micro and small enterprise (MSE) funding in Bosnia and Herzegovina. Since the beginning of its operations in the country in 2005, the EFSE has provided local banks and microfinance institutions with credit facilities totalling EUR 241.6 million, facilitating approximately 82,000 micro and small enterprise (MSE) loans, in addition to 14,800 home improvement loans. The EFSE’s support to the financial sector in Bosnia and Herzegovina also includes technical assistance, consulting and training offered to partner lending institutions to increase their outreach to MSEs, and sector-wide activities to promote Responsible Finance.

About the European Fund for Southeast Europe
The European Fund for Southeast Europe (EFSE) aims to foster economic development and prosperity in Southeast Europe and the European Eastern Neighbourhood region, including Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, FYR Macedonia, Georgia, Kosovo, Moldova, Montenegro, Romania, Serbia, Turkey and Ukraine. It provides long-term finance primarily for micro and small enterprises (MSEs) and private households in the form of home improvement loans channelled through local financial institutions. As access to finance is a key success factor in developing the micro, small and medium enterprise segments, the EFSE focuses on assisting local financial sectors in strengthening their ability to ensure adequate and sustainable financing. Supporting the EFSE’s investment activities is the EFSE Development Facility, which provides partner lending institutions with technical assistance, consulting and training services to build operational capacities and professional management. The EFSE was initiated by KfW Entwicklungsbank (The German Development Bank) on 15 December 2005 from four multi-donor programs under its management. The EFSE is the first public-private partnership of its kind and the first privately managed fund in development finance to leverage private funding for MSE finance in the target region. Capital is provided by donor agencies, international financial institutions and private institutional investors, including the German Federal Ministry for Economic Cooperation and Development, the European Commission, the Government of Albania as the first EFSE shareholder from the EFSE’s target region, the Oesterreichische Entwicklungsbank (OeEB, the Development Bank of Austria), the Swiss Agency for Development and Cooperation (SDC), the Danish International Development Agency (Danida), KfW Entwicklungsbank as Lead Investor, the International Finance Corporation (IFC), the Netherlands Finance Company (FMO), the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), and Sal. Oppenheim and Deutsche Bank. Oppenheim Asset Management Services S.à.r.l, Luxembourg, and Finance in Motion GmbH, Germany, are, respectively, the EFSE’s Fund Manager and Fund Advisor.

About Mikrofin
Formally established twelve years ago Mikrofin always was and still is one of the most important players in the microfinance market in Bosnia and Herzegovina. The current market share of Mikrofin, in terms of gross loan portfolio, is approximately 27%. In spite of the difficulties Mikrofin and the whole microfinance sector have been facing over the last two years, Mikrofin continues to successfully serve low-income entrepreneurs. Mikrofin is the largest microfinance institution (MFI) in Bosnia and Herzegovina in terms of key institutional indicators. As at March 31, 2011 Mikrofin had total assets of BAM 201 million (EUR 103 million); a gross loan portfolio of BAM 175 million (EUR 89.5 million); 40.4 thousand clients and 60 offices all over Bosnia and Herzegovina. The long-term objective of Mikrofin is to provide the full range of financial services to its existing and new clients. Following this vision, Mikrofin made significant investments over recent years in the establishment of new subsidiaries including MF Banka and Mikrofin Insurance.

Media contact EFSE		Media contact Mikrofin
Samir Djikić Manager Communications Tel: +49 (0)69/977 876 50-26 E-mail: press@efse.lu		Ms Nataša Gvozdenović Marketing Manager & PR Tel: + 387 51 230-230-356 E-mail: ngvozdenovic@mikrofin.com