The European Fund for Southeast Europe (EFSE), a microfinance investment fund based in Luxembourg, has signed its largest loan agreement to date, a EUR 25 million senior loan, the equivalent of over USD 33.5 million, to Banca Intesa, a commercial bank in Serbia, which will be on-lent to micro- and small enterprises (MSEs). Much of this on-lending will be directed to the agricultural sector.

EFSE was initiated by KfW, a German development bank. Since December of 2005, EFSE has invested over EUR 720 million, the equivalent of over USD 965 million, in Southeast Europe, facilitating more than 200,000 loans. As of December 31, 2009, EFSE had an outstanding investment portfolio of EUR 578 million, the equivalent of over USD 775 million, and assets worth USD 830 million.

By Christopher Maggio, Research Assistant

About
European Fund for Southeast Europe (EFSE)

Description
The European Fund for Southeast Europe (EFSE) aims to foster economic development in the southeastern Europe region by providing financial services to micro- and small enterprises and to private low-income households via qualified local financial institutions. EFSE was set up in 2005, with KfW, a German development bank, as the fund initiator and Oppenheim Asset Management S. à r. l. as the fund manager. Its sole fund adviser is Finance in Motion. Since its founding, EFSE has invested over EUR 720 million, the equivalent of over USD 965 million, in Southeast Europe, facilitating more than 200,000 loans. As of December 31, 2009, EFSE has an outstanding investment portfolio of EUR 578 million, the equivalent of over USD 775 million.

Just the Facts
- Country of Incorporation: Luxembourg
- Year Founded: 2005
- Legal Status: Luxembourg Investment fund (SICAV-SIF)
- Fund Assets (as of day/month/year): USD 830 million (as of 31/December/2009)
- Fund Assets Allocated to MFI Investment (as of day/month/year): USD 420 million (as of 31/December/2009)
- Number of MFI Investments (as of day/month/year): 58 (as of 31/December/2009)
- Area of Operation: Southeast Europe
- Participant(s)/Backer(s)/Investor(s): European Commission, Federal German Ministry for Economic Development and Cooperation (BMZ), the governments of Austria, Switzerland, Denmark and Albania, KfW, IFC, FMO Netherlands Development Bank, European Bank for Reconstruction and Development, European Investment Bank, OeEB Oesterreichische Entwicklungsbank (Development Bank of Austria), Sal. Oppenheim, Deutsche Bank, BN&P Good Growth Fund, ESPA VINIS Microfinance, Finance in Motion and other private investors
- Instruments: Loans and Debt Securities, Equity and quasi-equity, Guarantees, Term deposits, Subscriptions to bond issues, Stand-by letters of credit and Technical Assistance
- Fund Currency: EUR
- Investment Horizon: 10 years (loans and debt securities)
- Fund Manager: Oppenheim Asset Management Services S.á r.l.

About
Banca Intesa (Belgrade)

Description
Banca Intesa (Belgrade) is a commercial bank based in Belgrade, Serbia. It is 90-percent owned by the Italian banking corporation of the same name. Its products include retail loans, savings, bonds, small business loans and guarantees, farmer loans and electronic banking. On March 29, 2010, it was announced that Banca Intesa would receive a EUR 25 million senior loan, the equivalent of over USD 33.5 million, from the European Fund for Southeast Europe (EFSE), a microfinance investment fund based in Luxembourg. As of December 31, 2008, Banca Intesa has total assets worth RSD 32.2 billion, the equivalent of over USD 433 million.

Additional Resources
MicroCapital Microfinance Universe profile: EFSE

MicroCapital Microfinance Universe profile: Banca Intesa

PRESS RELEASE
EFSE signs its largest loan agreement ever: EUR 25 million to
Banca Intesa in Serbia

EFSE’s overall investments in the target region to amount to more than
EUR 200 million in 2010

Frankfurt am Main and Belgrade, March 26, 2010 – The European Fund for Southeast
Europe (EFSE), the world’s largest microfinance investment fund, and the commercial bank
Banca Intesa a.d. Belgrade (Banca Intesa), Serbia, today announced the signing of a senior
loan agreement. Under the agreement, Banca Intesa will take a loan of EUR 25 million from
EFSE. The loan will be utilised for further on-lending to micro and small enterprises (MSEs)
in Serbia, a sector that has been hit particularly hard by the crisis.

EFSE’s financing supports the bank’s growth strategy, which aims to expand the penetration
of loans to small businesses also in the segment of agriculture, where financing needs remain
very high.

Sylvia Wisniwski, Chief Operating Officer of EFSE and Managing Director of EFSE’s Fund
Advisor Finance in Motion, said: “The investment fits EFSE’s strategy of supporting wellmanaged
and financially sustainable financial institutions that are at the same time committed
to fair banking practices. Not only will the funding infuse long-term liquidity to support
Banca Intesa’s lending program to small businesses, allowing the Bank to offer better loan
conditions in the form of longer maturities to more than 1,500 additional small businesses. It
also has a significant development impact on the Serbian economy, creating and securing jobs
and income.”

“Strategic determination to support and invest in development of entrepreneurial spirit is what
makes Banca Intesa one of Serbia’s leading banks in the small business segment. As the needs
of our clients make the starting point in devising and creating our products, we strive to
offering small entrepreneurs all services that large companies already have at their disposal.
We expect that our cooperation with EFSE will stimulate the entrepreneurial sector and help
them achieve the best results possible”, said Dejan Teši?, member of the Executive Board of
Banca Intesa and Head of the Retail and Small Business Division.

EFSE is one of the largest single providers of finance for MSEs in Southeast Europe. Since its
inception in December 2005, the Fund has invested a cumulative total of over EUR 710
million in Southeast Europe, facilitating more than 200,000 loans to MSEs and low-income
private households.

Sylvia Wisniwski added: “EFSE will continue to help ensure a continuous flow of financing
to small businesses. The Fund stands ready to invest over EUR 200 million in the Southeast
European MSE finance sector in 2010. In doing so, the Fund will provide much-needed
financing to more than 20,000 MSEs.”