EFSE is more than just a fund: Its public-private partnership (PPP) structure has made the European Fund for Southeast Europe an international role model for intelligent and innovative development policy in the 21st century. The PPP approach enables EFSE to mobilise funding from private institutional investors to top up international public donor funding for development finance. In addition, it provides a platform for the coordination of donor activities in its regions. This pooling of resources multiplies the impact of budget funds towards a common goal: to promote responsible financial sector development in EFSE’s target countries and ensure MSEs and low-income households have sustainable access to financial services.
Finally, EFSE operates as a market enabler, facilitator and risk taker as well as an innovator and incubator for new financial products that benefit the target group.
The European Fund for Southeast Europe aims to foster economic development and prosperity in the Southeast Europe region and in the European Eastern Neighbourhood region through the sustainable provision of additional development finance, notably to micro and small enterprises (MSEs) and private households, via qualified financial institutions.
In pursuing its development goal, the fund observes principles of sustainability and additionality, combining development and market orientations.
EFSE generates measurable impact in the following:
- Supporting micro and small enterprises as the backbone of local economies, thereby contributing to income generation and employment creation
- Satisfying the basic need for decent shelter
- Strengthening local financial markets
Promoting regional cooperation
With its regional approach, the EFSE serves as a vehicle to strengthen economic cooperation between different countries.
Balancing social development and commercial approach
EFSE uses an innovative manner to combine a clear development orientation with private sector efficiency and positive risk-adjusted returns, thereby ensuring institutional sustainability.
Promoting private public partnerships and mobilise private capital for development
EFSE utilizes donor grants as a risk cushion for attracting private investors for development purposes. Up to seven times the amount of the initial investment and/or grant can be raised for the target group, representing significant leveraging capacity.
Facilitating access to capital markets
By mobilising private capital through the risk protection mechanism set in place with investor and donor funds and mezzanine capital from development finance institutions and international financial institutions, EFSE helps local and regional financial institutions access European and international capital markets.
Serving as a market enabler
EFSE acts as a risk taker to overcome prohibitive country-specific and institutional risks that prevent the financial sector from serving the fund‘s ultimate target groups. Furthermore, the fund plays an important role in anticipating market developments. By continuously adjusting its range of services and products, EFSE pushes the development finance frontier to the benefit of its target groups.
Ensuring the development mission through a mix of instruments at different levels
EFSE’s development mission is continuously assured through investor and donor representation at Board level and in various committees. Furthermore, development performance is constantly assessed against development targets and in the Development Impact Study that is commissioned on a regular basis.
Coordination platform for local and international stakeholders
The European Fund for Southeast Europe serves as a coordination platform for donor agencies, development finance institutions, and international financial institutions, as well as local governments.
It is envisaged that donor funds invested in EFSE will be partly or largely transferred to local stakeholders. In the future, therefore, local stakeholders will increasingly become shareholders in the fund, adding to the current local shareholders (Armenia and Albania).
Catering for the needs of donor and government programmes
EFSE allows earmarking grant funding for investments in specific countries and/or for specific activities of the EFSE Development Facility. Furthermore, the fund is also open to incorporating existing donor or government programmes that serve its ultimate target groups.
Contact point for complaints
For any complaints about the European Fund for Southeast Europe, please use the following email address: email@example.com.