Azerbaijan, Baku, Dec. 29 / Trend N.Ismayilova /
In an agreement reached at the general meeting, the shareholders of the European Fund for Southeast Europe (EFSE) approved an expansion of the Fund's target region to include four new countries of the European Eastern Neighborhood region: Armenia, Azerbaijan, Georgia and Belarus. This paves the way for the EFSE to provide financing for micro and small enterprises (MSEs) and home improvement in these countries, EFSE reported.
The expansion will enhance the level of financial intermediation in the new target countries and will bring much-needed financing, especially to MSEs in rural areas and to the private small-scale agriculture sector, the fund reported.
Over the next five years, the EFSE is expected to provide financing to banks and microfinance institutions in a total amount of EUR 300 million in the new target countries in addition to up to EUR 1 billion envisaged for the region of Southeast Europe. In doing so, the Fund will provide financing for approximately 70,000 loans to MSEs in the new target countries.
With an investment portfolio of EUR 559 million, the EFSE is the world's largest microfinance investment fund. Aimed at fostering economic development and prosperity in the region of Southeast Europe and European Eastern Neighbourhood countries, the Fund offers long-term funding instruments to qualified local financial institutions for on-lending to micro and small enterprises (MSEs) and low-income private households.
Since its inception in December 2005, the Fund has facilitated approximately 200,000 loans to MSEs and private households, totalling over EUR 1 billion. Initiated by KfW, the EFSE is a closed-ended investment company that falls under the jurisdiction of the Grand Duchy of Luxembourg in the form of a public limited company, qualifying as a société d'investissement à capital variable ("SICAV-SIF").
The Fund has a strong investor base of donors, international finance institutions and private institutional investors, including: European Commission, Federal German Ministry for Economic Development and Cooperation (BMZ), the governments of Austria, Switzerland, Denmark and Albania, KfW, International Finance Corporation, FMO Netherlands Development Bank, European Bank for Reconstruction and Development, European Investment Bank, OeEB Oesterreichische Entwicklungsbank (Development Bank of Austria), Sal. Oppenheim, Deutsche Bank, Crédit Coopératif, BN&P Good Growth Fund, Finance in Motion and other private investors.