MICROCAPITAL BRIEF: European Fund for Southeast Europe (EFSE) Lends $17m to Finansbank of Turkey, Half for Micro-, Small Enterprises

The European Fund for Southeast Europe (EFSE), a Luxembourg-based microfinance investment vehicle (MIV), recently extended a loan facility totalling EUR 15 million (approximately USD 17 million) to Finansbank A.S., a Turkish subsidiary of the National Bank of Greece Group, a financial conglomerate based in Athens.Half of the loan will be used to on-lend in “Priority Development Regions” in Turkey, with the remainder to be used to lend to micro- and small enterprises (MSEs). EFSE and Finansbank will collaborate to train Finansbank’s staff on agricultural lending and to support Finansbank’s “Future Bosses” programme, which is aimed at supporting young entrepreneurs.

Ms Monica Beck, the Chairperson of EFSE’s Board, said “The effectiveness with which Finansbank has on-lent the EFSE’s first credit facility in 2014 to the Fund’s final beneficiaries of micro and small enterprises and low-income households has shown the dedication of Finansbank to the EFSE’s target group. With small and medium enterprises accounting for more than 70 percent of all workplaces in Turkey, this new loan signifies important financial support to the rural areas in Turkey”.

Finansbank reported total assets of TRY 85 billion (approximately USD 29 billion), total loans of TRY 57 billion (approximately USD 20 billion), total deposits of TRY 47 billion (approximately USD 16 billion), return on average assets of 0.9 percent, return on average equity of 8 percent and approximately 5 million customers as of 2015. As of 2015, EFSE had an investment portfolio of EUR 895 million (approximately USD 1 billion).

By Imke Herholdt, Research Associate

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 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 2015, 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 2015, EFSE reported a gross loan portfolio of EUR 879 million (approximately USD 992 million).

About Finansbank A.S. (Finansbank)

Headquartered in Istanbul, Finansbank is a Turkish commercial bank that provides financial services to a range of customer types, including consumers, small businesses and corporations as well as offering private banking services. Finansbank is a subsidiary of the National Bank of Greece Group, a financial conglomerate based in Athens. Finansbank reported total assets of TRY 85 billion (approximately USD 29 billion), total loans of TRY 57 billion (approximately USD 20 billion), total deposits of TRY 47 billion (approximately USD 16 billion), total equity of TRY 9 billion (approximately USD 3 billion), return on average assets of 0.9 percent and return on average equity of 8.0 percent in 2015. As of the same year, Finansbank had 642 branches, 12,000 staff members and approximately 5 million customers.

Sources and Additional Resources
[1] European Fund for Southeast Europe
[2] MicroCapital Universe Profile: Finansbank
[3] MicroCapital Univers Profile: European Fund for Southeast Europe

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