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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, small and medium enterprises as well as improved living conditions for private households.
Approach
EFSE invests in carefully selected local financial intermediaries for on-lending to micro, small and medium 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 advisory and capacity building, 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: 5
Partner Institutions: BKT, FED Invest, Karavasta Solar SHPK, ProCredit Bank AL, SPV Blue 1 sh.p.k
Cumulative volume of sub-loans since inception: EUR 137,403,452
Number of active end-borrowers: 413
Development Facility project volume: EUR 3,508,959
Armenia
Active Number of Partner Institutions: 4
Partner Institutions: ACBA, ACBA Leasing, Araratbank, Inecobank
Cumulative volume of sub-loans since inception: EUR 809,362,061
Number of active end-borrowers: 1,715
Development Facility project volume: EUR 2,447,270
Azerbaijan
Active Number of Partner Institutions: 2
Partner Institution: AccessBank, Bank Respublika
Cumulative volume of sub-loans since inception: EUR 246,393,921
Number of active end-borrowers: 792
Development Facility project volume: EUR 1,044,177
Belarus
Active Number of Partner Institutions: -
Partner Institutions: -
Cumulative volume of sub-loans since inception: EUR 86,534,581
Number of active end-borrowers: -
Development Facility project volume: EUR 222,935
Bosnia and Herzegovina
Active Number of Partner Institutions: 13
Partner Institutions: MCC EKI, MCC Partner, MCF EKI, MCF MI-BOSPO, MCF Partner, MF Banka, Mikrofin, NLB Banka Sarajevo, ProCredit Bank BA, Raiffeisen Bank BA, Raiffeisen Leasing, Sparkasse Bank d.d. BiH, Sparkasse Leasing BiH
Cumulative volume of sub-loans since inception: EUR 862,528,648
Number of active end-borrowers: 12,349
Development Facility project volume: EUR 7,658,683
Bulgaria
Active Number of Partner Institutions: 2
Partner Institutions: Allianz Bank Bulgaria, ProCredit Bank BG
Cumulative volume of sub-loans since inception: EUR 106,261,476
Number of active end-borrowers: 382
Development Facility project volume: EUR 317,128
Croatia
Active Number of Partner Institutions: 2
Partner Institutions: Hrvatska Poštanska Banka, Zagrebačka banka
Cumulative volume of sub-loans since inception: EUR 24,670,300
Number of active end-borrowers: 1
Development Facility project volume: EUR 1,378,042
Georgia
Active Number of Partner Institutions: 12
Partner Institutions: Bank of Georgia, Basisbank, BGEO Group, Credo, Crystal Micro Financial Organisation, Dariali Energy, Isbank Georgia, Lazika Capital, Micro Business Capital, Pro Credit Bank GE, TBC Bank, TBC Leasing GE
Cumulative volume of sub-loans since inception: EUR 1,533,663,593
Number of active end-borrowers: 23,324
Development Facility project volume: EUR 4,551,733
Kosovo
Active Number of Partner Institutions: 4
Partner Institutions: AFK Kosovo, BKT Kosovo, KEP Trust, KRK
Cumulative volume of sub-loans since inception: EUR 375,294,821
Number of active end-borrowers: 9,811
Development Facility project volume: EUR 3,840,607
North Macedonia
Active Number of Partner Institutions: 6
Partner Institutions: Halkbank MK, Horizonti, Oslomej, ProCredit Bnk MK, Sparkasse Bank MK, Thor Impex Dooel
Cumulative volume of sub-loans since inception: EUR 217,138,542
Number of active end-borrowers: 1,317
Development Facility project volume: EUR 1,588,968
Moldova
Active Number of Partner Institutions: 4
Partner Institutions: BT Leasing MD, MAIB, OTP Bank MD, Victoriabank SA
Cumulative volume of sub-loans since inception: EUR 203,754,797
Number of active end-borrowers: 2,296
Development Facility project volume: EUR 3,508,812
Montenegro
Active Number of Partner Institutions: 4
Partner Institutions: Alter Modus, CKB, Erste Bank Podgorica, Hipotekarna banka
Cumulative volume of sub-loans since inception: EUR 281,108,540
Number of active end-borrowers: 2,686
Development Facility project volume: EUR 1,795,443
Romania
Active Number of Partner Institutions: 9
Partner Institutions: AgGRICOVER CREDIT IFN, Banca Transilvania, BT Microfinantare, Garanti Leasing RO, LIBRA INTERNET BANK SA, Patria Bank SA, Patria Credit IFN, ProCredit Bank RO, Vitas Romania
Cumulative volume of sub-loans since inception: EUR 1,562,235,973
Number of active end-borrowers: 16,242
Development Facility project volume: EUR 2,731,085
Serbia
Active Number of Partner Institutions: 7
Partner Institutions: 3 Bank, Eurobank Direktna, Halkbank RS, OTP Banka Serbia, Procredit Bank RS, UniCredit Bank RS, Raiffeisen Bank RS
Cumulative volume of sub-loans since inception: EUR 1,508,037,569
Number of active end-borrowers: 7,556
Development Facility project volume: EUR 3,350,425
Turkey
Active Number of Partner Institutions: 13
Partner Institutions: AK Lease, Akbank, ÇİMKO ÇİMENTO VE BETON SANAYİ TİCARET A.Ş., Denizbank, Ford Otosan, Garanti Bank, Garanti Leasing TR, Isbank Türkiye, QNB Finans Leasing, QNB Finansbank, SANKO TEKSTİL İŞLETMELERİ SANAYİ VE TİCARET A.Ş., Yapi Kredi Leasing, Yapı ve Kredi Bankası A.Ş.
Cumulative volume of sub-loans since inception: EUR 1,933,261,356
Number of active end-borrowers: 6,478
Development Facility project volume: EUR 4,851,755
Ukraine
Active Number of Partner Institutions: 10
Partner Institutions: Agroprosperis Bank, Boguslav, Bank Lviv, Credit Agricole Bank, Kredobank, Novus, OTP Leasing, Piraeus Bank UA, ProCredit Bank UA, Syvash
Cumulative volume of sub-loans since inception: EUR 363,526,777
Number of active end-borrowers: 1,282
Development Facility project volume: EUR 4,696,217
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, small and medium enterprises finance
- Financing for rural areas
- Housing finance
What makes EFSE special?
Blended finance for more impact
EFSE was one of the first impact investment vehicles to pioneer a public-private partnership model. This layered and blended finance structure leverages public contributions as a risk cushion to mobilize private investments and 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.
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.
Advisory and capacity buidling for systemic impact
EFSE's financial investments are complemented by advisory and capacity building, 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.
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.
The EFSE Board of Directors are representatives elected by the shareholders to exercise oversight of the fund and determine its strategic direction and approach.
This forum for central bank representatives of the countries where EFSE is present provides a platform for sharing local developments, experiences, and policy recommendations.
Appointed by the Board, this committee is responsible for the fund's internal controls, accounting integrity, and risk management process.
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.
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.
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.
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
