The Entrepreneurship Fund
Mission
The European Fund for Southeast Europe (EFSE) aims to foster economic development and prosperity in Southeast Europe and the Eastern Neighbourhood Region by investing in the success of micro and small enterprises as well as improved living conditions for private households.
Approach
EFSE invests in carefully selected local financial intermediaries for on-lending to micro and small enterprises and private households. These investees include commercial banks, microfinance institutions, and non-bank financial institutions such as leasing companies.
In addition, the EFSE Development Facility provides technical assistance, training, and other non-financial support to institutions and individuals to anchor and multiply the fund’s impact. Together, EFSE and its Development Facility build an environment that fosters sustainable entrepreneurship.
Please click on your country of interest.
Albania
Active Number of Partner Institutions: 1
Partner Institutions: FED Invest
Cumulative volume of sub-loans since inception: EUR 114,917,243
Number of active end-borrowers: 245
Development Facility project volume: EUR 3,295,650
Armenia
Active Number of Partner Institutions: 5
Partner Institutions: ACBA, ACBA Leasing, Araratbank, Inecobank, SEF International
Cumulative volume of sub-loans since inception: EUR 692,908,213
Number of active end-borrowers: 3,812
Development Facility project volume: EUR 1,992,849
Azerbaijan
Active Number of Partner Institutions: 2
Partner Institution: AccessBank, Bank Respublika
Cumulative volume of sub-loans since inception: EUR 228,843,667
Number of active end-borrowers: 174
Development Facility project volume: EUR 867,656
Belarus
Active Number of Partner Institutions: 2
Partner Institutions: Belinvestbank, BNB - Belarusky Narodny Bank
Cumulative volume of sub-loans since inception: EUR 86,534,584
Number of active end-borrowers: -
Development Facility project volume: EUR 154,325
Bosnia and Herzegovina
Active Number of Partner Institutions: 13
Partner Institutions: Addiko Bank a.d. Banja Luka, Intesa Sanpaolo Banka, MCC EKI, MCF EKI, MF Banka, MI-BOSPO, Mikrofin, NLB Banka Banja Luka, NLB Banka Sarajevo, Partner, Raiffeisen Bank BA, Raiffeisen Leasing, Sparkasse Bank d.d. BiH, Sunrise
Cumulative volume of sub-loans since inception: EUR 751,143,194
Number of active end-borrowers: 13,695
Development Facility project volume: EUR 5,569,939
Bulgaria
Active Number of Partner Institutions: na
Cumulative volume of sub-loans since inception: EUR 45,918,866
Number of active end-borrowers: na
Development Facility project volume: EUR 30,080
Croatia
Active Number of Partner Institutions: na
Cumulative volume of sub-loans since inception: EUR 24,630,301
Number of active end-borrowers: na
Development Facility project volume: EUR 677,968
Georgia
Active Number of Partner Institutions: 8
Partner Institutions: Bank of Georgia, Basisbank, BGEO Group, Credo, Crystal Micro Financial Organisation, Lazika Capital, TBC Bank, TBC Leasing GE
Cumulative volume of sub-loans since inception: EUR 1,260,476,745
Number of active end-borrowers: 25,566
Development Facility project volume: EUR 3,636,150
Kosovo
Active Number of Partner Institutions: 5
Partner Institutions: AfK, BKT Kosovo, BpB, KEP Trust, KRK
Cumulative volume of sub-loans since inception: EUR 316,400,775
Number of active end-borrowers: 4,513
Development Facility project volume: EUR 3,351,657
North Macedonia
Active Number of Partner Institutions: 3
Partner Institutions: Halkbank MK, Horizonti, Sparkasse Bank MK
Cumulative volume of sub-loans since inception: EUR 215,968,327
Number of active end-borrowers: 1,091
Development Facility project volume: EUR 905,674
Moldova
Active Number of Partner Institutions: 2
Partner Institutions: BT Leasing MD, MAIB
Cumulative volume of sub-loans since inception: EUR 171,464,088
Number of active end-borrowers: 360
Development Facility project volume: EUR 2,516,089
Montenegro
Active Number of Partner Institutions: 3
Partner Institutions: alter Modus, CKB, Erste Bank Podgorica
Cumulative volume of sub-loans since inception: EUR 252,218,998
Number of active end-borrowers: 3,199
Development Facility project volume: EUR 1,240,158
Romania
Active Number of Partner Institutions: 9
Partner Institutions: Agricover, Alpha Bank, Banca Transilvania, BT Leasing RO, BT Microfinantare, Garanti Leasing RO,Libra Internet Bank SA, Patria Credit, Vitas Romania
Cumulative volume of sub-loans since inception: EUR 1,154,269,926
Number of active end-borrowers: 15,440
Development Facility project volume: EUR 1,903,391
Serbia
Active Number of Partner Institutions: 5
Partner Institutions: 3 Bank, Eurobank, Halkbank RS (Cacanska Banka), Procredit Bank RS, UniCredit Bank RS
Cumulative volume of sub-loans since inception: EUR 1,332,425,127
Number of active end-borrowers: 8,861
Development Facility project volume: EUR 2,278,032
Turkey
Active Number of Partner Institutions: 8
Partner Institutions: Alternatifbank, Denizbank, Garanti Bank, Garanti Leasing TR, QNB Finans Leasing, QNB Finansbank, Yapi Kredi Bank, Yapi Kredi Leasing
Cumulative volume of sub-loans since inception: EUR 1,778,642,657
Number of active end-borrowers: 12,008
Development Facility project volume: EUR 4,095,576
Ukraine
Active Number of Partner Institutions: 7
Partner Institutions: Agroprosperis Bank, Bank Lviv, Credit Agricole Bank, Kredobank, OTP Leasing, Piraeus Bank UA, ProCredit Bank UA
Cumulative volume of sub-loans since inception: EUR 323,356,069
Number of active end-borrowers: 1,596
Development Facility project volume: EUR 1,027,035
SOUTHEAST EUROPE
European Eastern Neighborhood Region
Who Does EFSE Finance?
EFSE provides funding to local financial institutions that have confirmed their commitment to the fund’s mission, and which have the capacity to reach entrepreneurs and private households. By supporting the ability of these financial intermediaries to serve EFSE’s target group, the fund is not only amplifying its impact through the utilization of local financial infrastructure, it is also strengthening the ability of the financial sector in these regions to advance sustainable development in the long term..
EFSE provides 3 types of loans to its financial intermediaries. These are then used for on-lending for one or more of the following predefined purposes:
- Micro and small enterprises finance
- Financing for rural areas
- Housing finance
EFSE in numbers
Key figures as of Q4 2021
Key figures since inception of the Development Facility in 2006
Blended finance for more impact
EFSE was one of the first impact investment vehicles to pioneer a public-private partnership model. This layered “blended finance” structure leverages public contributions as a risk cushion to mobilize private investments – thus unleashing more resources for impact. As a result, public investors can achieve more social and economic development for their money, and private investors can enter markets that may otherwise have been viewed as too risky to enter alone.
Local currency for local business
Local currency lending is a key element of responsible finance: When borrowers can invest in their home or business using the same currency as their income, they are protected from potentially hazardous ups and downs in exchange rates. EFSE has dedicated instruments to absorb this currency risk so that investees do not have to. The European Union and the German Federal Ministry for Cooperation and Development (BMZ) both contributed to a special fund layer for this purpose: the “L-shares”. EFSE is now active in spreading this responsible financing practice, as well as the awareness of its importance.
Innovations for financial inclusion
EFSE has a solid 15-year track record and a reputation as a stalwart partner in the region. But it is also an agile agent of innovation. Itself a pioneer, EFSE seeks out high-potential new developments, such as in fintech, to increase financial inclusion and supports entrepreneurs and partners alike with the development and implementation of new technologies.
In-region offices for on-the-ground presence
EFSE is active in 16 countries in Southeast Europe and the EU Eastern Neighbourhood. Our local experts work from in-region offices close to our clients and networks. EFSE’s deep understanding of the markets where we are active comes from working side-by-side with investees, partners, national regulators, and entrepreneurship organisations to provide tailored support for local needs.
Technical assistance for systemic impact
EFSE’s financial investments are complemented by technical assistance provided by the EFSE Development Facility. Because making a lasting difference means building an environment where positive impact can take root: The Development Facility works with institutions and individuals alike to build capacities, train skills, connect ecosystem players, study the market, and build a culture of entrepreneurship and responsible finance.
Corporate Governance
EFSE’s governance is based on a solid foundation and transparent processes. EFSE is set up as a SICAV-SIF under Luxembourg law, a proven vehicle for numerous impact investment funds.
The Board of Directors, appointed by the fund’s shareholders, is EFSE’s main decision-making body. The Investment Committee approves investment proposals submitted by the fund’s advisor, Finance in Motion. The members of the EFSE Investment Committee are appointed by the Board of Directors.
General Shareholder Assembly
The public investors into EFSE’s first-loss shares form the fund’s shareholder base, including fund initiator KfW, the European Commission, the German Federal Ministry for Cooperation and Development, and more. Private investors include impact-minded institutions such as ethical banks, pension funds, family offices, and more.
Board of Directors
The EFSE Board of Directors are representatives elected by the shareholders to exercise oversight of the fund and determine its strategic direction and approach.
Advisory Group
This forum for central bank representatives of the countries where EFSE is present provides a platform for sharing local developments, experiences, and policy recommendations.
Audit & Risk Committee
Appointed by the Board, this committee is responsible for the fund’s internal controls, accounting integrity, and risk management process.
Investment Committee
The Board of Directors appoints an Investment Committee comprising experts in the field of development finance. The Investment Committee approves all investments made by EFSE.
FX Committee
The Board also appoints an FX Committee to vet pricing and other matters pertaining to the fund’s local currency investments made utilising its “L-Share” class.
Manager
Hauck & Aufhäuser Fund Services S.A. is responsible for cash planning, direct operating expenses, FX monitoring, coordinating external tax advisors and hedging counterparties, and other management services under Luxembourg law.
Advisor
The Advisor, Finance in Motion GmbH, is the implementing arm of the fund, working directly with the Board and Committees to propose investments, advise on strategies, liaise with investors and investees, and carry out the decisions of the Board and Committees.
EFSE’S HISTORY
