MICROCAPITAL BRIEF: European Fund for Southeast Europe (EFSE), International Finance Corporation (IFC) Loan $97m to Alternatifbank of Turkey for On-Lending to Micro, Small Enterprises (MSEs); Energy Efficiency; Renewable Energy

The European Fund for Southeast Europe (EFSE), a Luxembourg-based microfinance investment vehicle (MIV), and the International Finance Corporation (IFC), a member of the US-based World Bank Group that seeks to increase economic growth in developing countries, recently announced that the two organizations will disburse a senior loan of USD 97 million to Alternatifbank (ABank), a private commercial bank in Turkey. EFSE’s share of the multipurpose credit facility is USD 22 million, an amount that is intended to support micro- and small enterprises (MSEs). IFC’s share will be dedicated to fund MSEs as well as to finance energy efficiency and renewable energy projects for the clients of ABank.

Ms Monika Beck, the chairperson of the board of EFSE, said that “ABank is a valuable partner of the EFSE, and we are pleased to support ABank in its efforts to foster economic growth and job creation in Turkey” [1]. Ms Meric Ulusahin, the chief executive officer of ABank added that “this is a great opportunity for ABank and also for Turkey. With this additional funding, we will continue supporting our clients with long-term financing for their businesses and contribute to the growing economy” [1].

As of December 31, 2014, ABank reported total assets of TRY 10.7 billion (approximately USD 4.1 billion), net total loans of TRY 7.9 billion (USD 3 billion) and total deposits of TRY 5.7 billion (USD 2.2 billion). As of 2014, EFSE reported a gross loan portfolio of EUR 940.5 million (approximately USD 1 billion). In June 2014, IFC reported total assets of USD 84.1 billion, net income of USD 1.4 billion and return on assets of 1.8 percent.

By Alíz Crowley, Research Associate

About Alternatifbank

Alternatifbank A.S. (ABank), founded in 1991, is a private commercial bank in Turkey. Shareholders of ABank include the Commercial Bank of Qatar (74.25 percent), a Qatar-based financial conglomerate, and the Anadolu Group (25 percent), a Turkish conglomerate with interests in the beverage, automotive, financial services, retail and energy sectors. The remaining shares (0.75 percent) are publicly quoted on the Istanbul Stock Exchange as of December 31, 2014. ABank operates a network of 73 branches in Turkey, particularly in industrial centers. As of December 31, 2014, ABank reported total assets of TRY 10.7 billion (approximately USD 4.1 billion), net total loans of TRY 7.9 billion (USD 3 billion) and total deposits of TRY 5.7 billion (USD 2.2 billion).

About European Fund for Southeast Europe (EFSE)

The Luxembourg-based European Fund for Southeast Europe (EFSE) focuses on the development of local financial sectors in Southeast Europe and parts of Central Asia. EFSE provides “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 supporting capacity building within these partner institutions. EFSE was established in 2005 by Germany’s 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 and Turkey, the former Yugoslav Republic of Macedonia. As of 2014, EFSE reported a gross loan portfolio of EUR 940.5 million (approximately USD 1 billion). As of September 2014, EFSE holds a microfinance label from Luxembourg Fund Labeling Agency (LuxFLAG), an NGO that certifies that social investment vehicles actually invest as advertised.

About International Finance Corporation

The International Finance Corporation (IFC), a US-based multilateral development bank and member of the World Bank Group, offers loans, equity investments, advisory and risk mitigation services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. As of 2014, IFC has 184 member countries that drive its policies and approve disbursements. In June 2014, IFC reported total assets of USD 84.1 billion, net income of USD 1.4 billion and return on assets of 1.8 percent.

Sources and Additional Resources

[1] European Fund for Southeast Europe, News, EFSE and IFC support Alternatifbank with multi-purpose senior loan facility

[2] Alternatifbank, Annual Review 2014

MicroCapital, May 7, 2015, EFSE Lends $7.8m to Microfinance Institutions Mikrofin of Bosnia and Herzegovina, Opportunity Bank Serbia

MicroCapital, February 25, 2015, European Fund for Southeast Europe Loans $23m to Burgan Bank of Turkey for Rural MSMEs

MicroCapital, January 20, 2015, European Fund for Southeast Europe (EFSE) Loans $34.6m to Garanti Leasing for On-lending to Micro-, Small Enterprises in Turkey; Banca Intesa Beograd (BIB) for Agriculture in Serbia

MicroCapital Universe Profile: Alternatifbank

MicroCapital Universe Profile: European Fund for Southeast Europe (EFSE)

MicroCapital Universe Profile: International Finance Corporation

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