From the outset the EFSE has remained committed to implementing its mission responsibly and sustainably. The EFSE supports the UN sustainable development agenda as currently documented by the Millennium Development Goals. It also reaches beyond to make the world a better place.
As the world’s largest microfinance fund, the EFSE’s corporate values hinge on key ethics underpinnings:

  • Additionality
  • Transparency in the disclosure of information,
  • Ensuring compliance of partner lending institutions with high standards of business ethics
  • Close monitoring of partner lending institutions and end-borrowers,
  • Physical presence in the markets and proximity to partner lending institutions
  • Responsible HR policy of the EFSE’s service providers

The EFSE’s high business ethics include ensuring the delivery of financial services in its target regions in a transparent and fair manner that reflects the principles of Responsible Finance, which the EFSE actively demonstrates through its actions and in a hands-on approach.

Why Responsible Finance?

Responsible finance has become an increasing concern in microfinance and traditional banking. Reports of price gouging and opacity, unfair contract provisions, aggressive collection practices, and luring borrowers into over-indebtedness have become more frequent in some markets. The recent global crises have exacerbated these problems, with clients in many markets facing additional financial stress as a result of higher prices, fewer remittances and economic stagnation. Increasingly, specific efforts have to be made to ensure that end-beneficiaries of microfinance services can count on safe, transparent and appropriate products, and that institutions perform in a socially sustainable manner. The focus is on products, processes and policies that avoid harmful treatment of borrowers, fairly balance the interests of all stakeholders – including users of financial services financial service providers and investors – and achieve the social mission of microfinance.

Responsible Finance - the EFSE approach

A practical approach to promoting Responsible Finance

The EFSE has always been a leader in promoting Responsible Finance practices. The delivery of financial services in the financial sectors of its regions in a transparent and fair manner ranks above return expectations. Stability and integrity in financial markets is at the core of the EFSE business model and crucial to the EFSE’s long-term investment horizon. The EFSE actively demonstrates its commitment to Responsible Finance through its actions, e.g. by promoting financial literacy among end-borrowers, adhering to responsible investing principles, and raising awareness of Responsible Finance among financial sector stakeholders.

The EFSE is committed to promoting Responsible Finance practices in a very practical and hands-on manner. This commitment stems from the EFSE’s social mission to improve access to credit for less privileged population groups. Furthermore, stable and transparent financial markets are the foundation to the EFSE’s business model and crucial to its long-term investment horizon.

The end-borrowers dimension

Promoting financial literacy

The EFSE aims to enhance the level of understanding of financial terms and concepts among end-borrowers. The objective is to help clients make well-informed decisions regarding the financial services they need and the obligations they undertake.

Preventing over-indebtedness

The financial crisis has shown that ill-informed or undereducated clients in particular tend to contract more debt than they can afford, and they quickly become submerged when they encounter unexpected hardship or macroeconomic conditions deteriorate. The Fund aims to raise awareness among end-borrowers through public campaigns, by working on industry codes of conduct to limit the debt burden to single client households and by supporting the set-up of debt advice centers.

The partner lending institution dimension

Responsible Finance assessment of partner lending institutions

In addition to assessing the financial strength of every partner lending institution, the EFSE also examines the scope and quality of corporate values and business practices employed by its partners. The Social Responsible Finance Aassessment covers the following areas: environmental, social and governance aspects, responsible business model and impact for development (ESGRID). The Responsible Finance assessment is prepared for every new partner institution as part of the due diligence process; the score is reviewed on an annual basis.

Promoting sound social and environmental management systems

The EFSE promotes the implementation of sound social and environmental policies and management systems in partner lending institutions. For instance, as a minimum standard, the EFSE requires each partner lending institution to refrain from financing activities listed in a social and environmental exclusion list. The EFSE Development Facility also proactively offers training in this area. Progress made at the partner lending institution level is reviewed annually.
The social dimension of the EFSE’s commitment to Responsible Finance includes:

  • Labour standards
  • Working conditions
  • Community impacts (i.e. public health, cultural heritage, safety and security, gender equality, non-discrimination)

The environmental dimension primarily covers impacts on:

  • Natural and environmental resources
  • Biodiversity
  • Communities (water, air pollution)

The EFSE and its partner lending institutions strictly adhere to these social and environmental policies.

The financial sector dimension

Promoting responsible financial instruments

The EFSE aims to provide long-term funding in a manner that is conducive to developing local financial markets. For example, the EFSE provides local currency financing wherever possible. Markets under strain, as was evident during the financial crisis, also require a flexible approach from investors. Under these circumstances, the EFSE adjusts its terms and conditions and gives partner lending institutions the necessary leeway to better cope with the effects of financial and economic crises whilst maintaining high risk mitigation standards.

Raising awareness of Responsible Finance

With the aim to sensitise the public in the target regions to the issues of Responsible Finance, the EFSE organises joint seminars and conferences with KfW and central banks in the regions . In addition, the EFSE commissions studies in the area of Responsible Finance to obtain empirical evidence.
Active support of the SMART Campaign and other industry initiatives
The EFSE was among the first signatories of the SMART Campaign, a joint initiative of CGAP and ACCION International to promote consumer protection in the microfinance industry.

The fund and investor dimension

Transparency of information

The EFSE is committed to maximum transparency in all its operations. In addition to the official reports submitted to the Luxembourg Supervisory Agency for the Investment Fund Industry (CSSF), the EFSE publishes quarterly data on its investment portfolio, financial and development performance (available on www.efse.lu and microfinance information platforms).

Regular social performance monitoring

On a quarterly basis, the EFSE monitors the proper use of the funds by its partner lending institutions to the end-borrowers, i.e. through the collection and analysis of a comprehensive set of subloan data.

Oppenheim Asset Management Services S.à Thomas Albert 2, Boulevard Konrad Adenauer 1115 Luxembourg

Thomas Albert, Oppenheim Asset Management Services S.à
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+352 (0) 221 522-450 +352 (0) 221 522-9450 +352 (0) 621 290894 thomas.albert@oppenheim.lu

Finance in Motion GmbH Sylvia Wisniwski Carl-von-Noorden-Platz 5 60596 Frankfurt am Main Germany

Sylvia Wisniwski, Finance in Motion GmbH
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+49 (0) 69 271 035 - 0 +49 (0) 69 271 035 - 110 s.wisniwski@finance-in-motion.com

Finance in Motion GmbH Gemma Ferst Carl-von-Noorden-Platz 5 60596 Frankfurt am Main Germany

Gemma Ferst, Finance in Motion GmbH
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Finance in Motion GmbH Mejra Juzbăsić Kralja Tvrtka 12/2 71000 Sarajevo Bosnia and Herzegovina

Mejra Juzbăsić, Finance in Motion GmbH
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Finance in Motion GmbH Oxana Binzaru 67, Hanrapetutyan street 0010 Yerevan Armenia

Oxana Binzaru, Finance in Motion GmbH
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Finance in Motion GmbH Oxana Binzaru 25, M. Bănulescu Bodoni str., 3rd floor, room 31 MD - 2012 Chișinău Republic of Moldova

Oxana Binzaru, Finance in Motion GmbH
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Finance in Motion GmbH Dragan Spirovski Maksim Gorki 20/3 1000 Skopje FYR Macedonia

Dragan Spirovski, Finance in Motion GmbH
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Finance in Motion GmbH Iveta Tancheva-Nikolova 24 Rustaveli Avenue, III Floor 0108 Tbilisi Georgia

Iveta Tancheva-Nikolova, Finance in Motion GmbH
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Finance in Motion GmbH Mejra Juzbăsić Qamil Hoxha 7 1/6 10000 Prishtina Kosovo

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Finance in Motion GmbH Oxana Binzaru 25, M. Bănulescu Bodoni str., 3rd floor, room 31 MD - 2012 Chișinău Republic of Moldova

Oxana Binzaru, Finance in Motion GmbH
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Finance in Motion GmbH Vladan Curic Bulevar Svetog Petra Cetinjskog 114 81000 Podgorica Montenegro

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Finance in Motion GmbH Vladan Curic Airport City, Omladinskih brigada 90v, building 1700, 8th floor 11070 Belgrade Serbia

Vladan Curic, Finance in Motion GmbH
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Finance in Motion GmbH Burcu Karpuz Buyukdere Caddesi No: 237; Noramin Is Merkezi A103 34398 Maslak, Sariyer, Istanbul Turkey

Burcu Karpuz, Finance in Motion GmbH
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+90 212 286 01 23 +90 212 286 01 22 turkey@finance-in-motion.com

Finance in Motion GmbH Oxana Binzaru Shovkovychna Str. 10, office 4 01021 Kyiv Ukraine

Oxana Binzaru, Finance in Motion GmbH
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Finance in Motion GmbH Iveta Tancheva-Nikolova Carl-von-Noorden-Platz 5 60596 Frankfurt am Main Germany

Iveta Tancheva-Nikolova, Finance in Motion GmbH
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Finance in Motion GmbH Dragan Spirovski Maksim Gorki 20/3 1000 Skopje FYR Macedonia

Dragan Spirovski, Finance in Motion GmbH
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Finance in Motion GmbH Oxana Binzaru 25, M. Bănulescu Bodoni str., 3rd floor, room 31 MD - 2012 Chișinău Republic of Moldova

Oxana Binzaru, Finance in Motion GmbH
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+373 (0) 22 54 46 - 26 +373 (0) 22 54 46 - 26 belarus@finance-in-motion.com

Finance in Motion GmbH Dragan Spirovski Maksim Gorki 20/3 1000 Skopje FYR Macedonia

Dragan Spirovski, Finance in Motion GmbH
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Finance in Motion GmbH Mejra Juzbăsić Kralja Tvrtka 12/2 71000 Sarajevo Bosnia and Herzegovina

Mejra Juzbăsić, Finance in Motion GmbH
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+387 (0) 33 56 11 - 90 +387 (0) 33 56 11 - 91 albania@finance-in-motion.com

Finance in Motion GmbH Sylvia Wisniwski Carl-von-Noorden-Platz 5 60596 Frankfurt am Main Germany

Sylvia Wisniwski, Finance in Motion GmbH
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+49 (0) 69 271 035 - 0 +49 (0) 69 271 035 - 110 press@efse.lu

Finance in Motion GmbH Charlotte Rieser Carl-von-Noorden-Platz 5 60596 Frankfurt am Main Germany

Charlotte Rieser, Finance in Motion GmbH
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+49 (0) 69 271 035 - 435 +49 (0) 69 271 035 - 110 ta@finance-in-motion.com

KfW Christoph Tiskens Palmengartenstr. 5-9 60325 Frankfurt am Main Germany

Christoph Tiskens, KfW
Phone E-Mail
+49 (0)69 7431 4260 christoph.tiskens@kfw.de

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Oppenheim Asset Management Services S.à Thomas Albert 2, Boulevard Konrad Adenauer 1115 Luxembourg

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Finance in Motion GmbH Sylvia Wisniwski Carl-von-Noorden-Platz 5 60596 Frankfurt am Main Germany

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Finance in Motion GmbH Mejra Juzbăsić Kralja Tvrtka 12/2 71000 Sarajevo Bosnia and Herzegovina

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Finance in Motion GmbH Oxana Binzaru 67, Hanrapetutyan street 0010 Yerevan Armenia

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Finance in Motion GmbH Dragan Spirovski Maksim Gorki 20/3 1000 Skopje FYR Macedonia

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Finance in Motion GmbH Iveta Tancheva-Nikolova 24 Rustaveli Avenue, III Floor 0108 Tbilisi Georgia

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Finance in Motion GmbH Mejra Juzbăsić Qamil Hoxha 7 1/6 10000 Prishtina Kosovo

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Finance in Motion GmbH Oxana Binzaru 25, M. Bănulescu Bodoni str., 3rd floor, room 31 MD - 2012 Chișinău Republic of Moldova

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Finance in Motion GmbH Vladan Curic Bulevar Svetog Petra Cetinjskog 114 81000 Podgorica Montenegro

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Finance in Motion GmbH Vladan Curic Airport City, Omladinskih brigada 90v, building 1700, 8th floor 11070 Belgrade Serbia

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Finance in Motion GmbH Burcu Karpuz Buyukdere Caddesi No: 237; Noramin Is Merkezi A103 34398 Maslak, Sariyer, Istanbul Turkey

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Finance in Motion GmbH Oxana Binzaru Shovkovychna Str. 10, office 4 01021 Kyiv Ukraine

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Finance in Motion GmbH Iveta Tancheva-Nikolova Carl-von-Noorden-Platz 5 60596 Frankfurt am Main Germany

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Finance in Motion GmbH Dragan Spirovski Maksim Gorki 20/3 1000 Skopje FYR Macedonia

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Finance in Motion GmbH Oxana Binzaru 25, M. Bănulescu Bodoni str., 3rd floor, room 31 MD - 2012 Chișinău Republic of Moldova

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Finance in Motion GmbH Dragan Spirovski Maksim Gorki 20/3 1000 Skopje FYR Macedonia

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Finance in Motion GmbH Mejra Juzbăsić Kralja Tvrtka 12/2 71000 Sarajevo Bosnia and Herzegovina

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Finance in Motion GmbH Sylvia Wisniwski Carl-von-Noorden-Platz 5 60596 Frankfurt am Main Germany

Sylvia Wisniwski, Finance in Motion GmbH
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Finance in Motion GmbH Charlotte Rieser Carl-von-Noorden-Platz 5 60596 Frankfurt am Main Germany

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KfW Christoph Tiskens Palmengartenstr. 5-9 60325 Frankfurt am Main Germany

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