MICROCAPITAL BRIEF: European Fund for Southeast Europe (EFSE) Loans $15m to AccessBank of Azerbaijan

The European Fund for Southeast Europe (EFSE), a Luxembourg-based microfinance investment vehicle (MIV), reportedly has provided a senior loan of USD 15 million to AccessBank, a microfinance institution (MFI) in Azerbaijan. AccessBank plans to use the funds for on-lending to approximately 7,000 microfinance clients residing in rural areas. The term of the loan has not been released.

AccessBank was founded in 2002 to provide credit and other financial services to Azerbaijan’s small businesses and low-income families. Access Microfinance Holding, a German company that invests in MFIs, is a minority shareholder in AccessBank. As of 2012, AccessBank reports deposits of USD 240 million, a gross loan portfolio of USD 581 million, total assets of USD 656 million and as of 2014, serves approximately 140,000 clients. Access Microfinance Holding also holds stakes in similar institutions in Tajikistan and four African countries.

EFSE seeks to aid economic development in southeastern Europe and parts of central Asia by supporting the provision of financial services to low-income households and micro- and small enterprises (MSEs) via local financial institutions. As of June 2013, EFSE has an investment portfolio of EUR 774 million (USD 1 billion).

By Meraj Husain, Research Associate

About AccessBank of Azerbaijan

AccessBank was founded in 2002 to provide credit and financial services to Azerbaijan’s small businesses and low-income families. AccessBank is owned by the following six shareholders: the Black Sea Trade and Development Bank, a Greece-based financial institution (20% ownership); the European Bank for Reconstruction and Development, a London-based financial institution (20% ownership); the International Finance Corporation, the World Bank Group’s private investment arm (20% ownership); Kreditanstalt für Wiederaufbau (KfW), a German development bank (20% ownership); Access Microfinance Holding, an investor in microfinance (16.5% ownership) and LFS Financial Systems, a German consulting company that manages Access Microfinance Holding (3.5% ownership). As of 2012, AccessBank reports deposits of USD 240 million, a gross loan portfolio of USD 581 million, total assets of USD 656 million and as of 2014, serves approximately 140,000 clients.

About Access Microfinance Holding AG

Access Microfinance Holding AG (AccessHolding) is a commercial microfinance holding company that was established in 2006 in Germany by LFS Financial Systems GmbH (LFS). It invests in microfinance institutions (MFIs) and as of December 2012, Access owns a controlling share in six financial institutions. AccessHolding aims to develop its investments through equity finance, holding services, and management services rendered by LFS, which acts as its technical partner. AccessHolding establishes new MFIs together with external partners and transforms existing non-bank microlending institutions into microfinance banks that offer a wider range of services such as deposits. AccessHolding is a joint-stock company with committed capital of EUR 26.4 million (USD 37 million). As of December 2012, AccessHolding has investments in AccesBanque Madagascar (55.2-percent share); AccessBank Azerbaijan (16.5-percent share); AccessBank Tanzania (52.7-percent share); AB Microfinance Bank Nigeria Limited (50.1-percent share); AccessBank Liberia (55.6-percent share); and AccessBank Tajikistan (52-percent share). As of the end of 2012, AccessHolding Group assets were reported at EUR 639 million (USD 838 million).

About European Fund for Southeast Europe (EFSE)

The European Fund for Southeast Europe (EFSE) was established in 2005 by Kreditanstalt für Wiederaufbau (KfW), a German development bank; with financial support from the German Federal Ministry for Economic Cooperation and Development (Bundesministerium für wirtschaftliche Zusammenarbeit und Entwicklung), which supports economic development both in Germany and abroad; and the European Commission, the executive body of the European Union. EFSE seeks to aid economic development in southeastern Europe and parts of central Asia by supporting the provision of financial services to low-income households and micro- and small enterprises via local financial institutions. EFSE 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. As of June 2013, EFSE has an investment portfolio of EUR 774 million (USD 1000 million). As of 2013, EFSE holds a microfinance label from Luxembourg Fund Labeling Agency (LuxFLAG), an NGO that certifies that social investment vehicles actually invest as advertised.

Sources and Additional Resources

[1] Access Bank: “EFSE grant AccessBank in Azerbaijan USD 15 million senior loan,” http://www.efse.lu/media/pdfs/press-releases/2014/2014-01-efse-grants-accessbank-in-azerbaijan-usd-15-million-senior-loan.pdf

MicroCapital, December 23, 2013, “European Fund for Southeast Europe (EFSE) Loans $3.4m to Agricultural Cooperative Bank of Armenia (ACBA) Leasing in Armenia, Makes $106k Equity Investment in Kreditimi Rural I Kosoves of Kosovo,” https://www.microcapital.org/microcapital-brief-european-fund-for-southeast-europe-efse-loans-3-4m-to-agricultural-cooperative-bank-of-armenia-acba-leasing-in-armenia-makes-106k-equity-investment-in-kreditimi-rural-i-koso/

MicroCapital, July 29, 2013, “Asian Development Bank (ADB) Loans $50m to AccessBank of Azerbaijan for Micro-, Small, Medium-sized Enterprises in Rural Areas,” https://www.microcapital.org/microcapital-brief-asian-development-bank-adb-loans-50m-to-accessbank-of-azerbaijan-for-micro-small-medium-sized-enterprises-in-rural-areas/

MicroCapital, March 18, 2013, “AccessBank of Azerbaijan Borrows $4.2m from European Bank for Reconstruction and Development (EBRD) for Energy Efficient Remodel of Headquarters,” https://www.microcapital.org/microcapital-brief-accessbank-of-azerbaijan-borrows-4-2m-from-european-bank-for-reconstruction-and-development-ebrd-for-energy-efficient-remodel-of-headquarters/

MicroCapital Universe Profile: AccessBank of Azerbaijan https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Access+Bank%2C+Azerbaijan

MicroCapital Universe Profile: Access Microfinance Holding AG https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Access+Microfinance+Holding+AG+%28AccessHolding%29

MicroCapital Universe Profile: European Fund for Southeast Europe (EFSE) https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=European+Fund+for+Southeast+Europe+%28EFSE%29

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