MICROCAPITAL BRIEF: EFSE Lends $2m to VisionFund’s SEF International for Micro-, Small Enterprises in Armenia

The European Fund for Southeast Europe (EFSE), a Luxembourg-based microfinance investment vehicle, recently announced that it has loaned AMD 970 million (USD 2 million) to Armenia’s SEF International to support the microfinance institution’s (MFI’s) lending to micro- and small businesses. SEF, which offers consumer, enterprise, farm and housing loans, was founded by US-based Christian relief organization World Vision International in 1997. It is owned by VisionFund International, a nonprofit microfinance subsidiary of World Vision. As of 2015, SEF reported total assets of USD 29 million, a gross loan portfolio of USD 23 million and 28,000 active borrowers.

As of 2017, VisionFund provides loans and other financial services to poor people in 30 developing markets, with an emphasis on serving rural areas. As part of its role within World Vision, VisionFund seeks to create “economic resilience in communities to help children grow up with improved nutrition, healthcare and access to education.” During 2016, VisionFund lent USD 729 million to 1.2 million people, about 75 percent of whom are women. The organization estimates that these loans supported 2.4 million jobs and 4 million children. World Vision reports serving 100 countries with 2015 revenues of USD 1 billion.

EFSE focuses on the development of local financial sectors in Southeast Europe and parts of Central Asia by providing “long-term” funding for micro- and small enterprises as well as private households via partner retail institutions. EFSE also operates the EFSE Development Facility, which provides technical assistance, consulting and training services to support capacity building within these institutions. EFSE was established in 2005 by German development bank Kreditanstalt für Wiederaufbau (KfW) with the financial support of the German Federal Ministry for Economic Cooperation and Development, which is also known by its German acronym BMZ, and the EU’s European Commission. The fund is privately managed, with Oppenheim Asset Management Services of Luxembourg acting as fund manager and Finance in Motion GmbH of Germany acting as fund advisor. EFSE operates in 16 countries: Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Georgia, Kosovo, Moldova, Montenegro, Romania, Serbia, Ukraine, Turkey and the Former Yugoslav Republic of Macedonia. As of 2017, EFSE holds a microfinance label from Luxembourg Fund Labeling Agency (LuxFLAG), an NGO that certifies that social investment vehicles actually invest as advertised. As of 2016, EFSE reported a gross loan portfolio of EUR 957 million (approximately USD 1.02 billion).

By Phoebe Rorke, Research Associate

Sources and Additional Resources

EFSE Press Release: EFSE, SEF International partner to fund development in rural Armenia

Information provided directly to MicroCapital by World Vision.

SEF International profile by MIX

SEF International

World Vision International

VisionFund International

MicroCapital Universe Profile: European Fund for Southeast Europe EFSE

LuxFLAG

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