The EFSE operates through partner lending institutions in Southeast Europe and in the European Eastern Neighbourhood Region. These financial intermediaries include commercial banks, microfinance banks, microcredit organisations and non-bank financial institutions such as leasing companies. They on-lend funds received from the EFSE to the ultimate target group: micro and small enterprises and low-income households. All of the EFSE’s partner lending institutions are carefully selected: in addition to financial stability, they must adhere to the EFSE’s ethics and governance standards in ensuring fair treatment of their customers and transparent operations.
The EFSE relies on the EFSE Development Facility – a separate entity funded by donor grants – to provide the technical and capacity building support that partner lending institutions need to function more effectively and grow in their respective markets. The EFSE Development Facility plays a crucial role in enhancing the long-term development impact of the Fund’s investments.