MICROCAPITAL BRIEF: European Fund for Southeast Europe (EFSE) Loans $20m to ProCredit Bank Serbia for Small, Medium-sized Enterprises

The European Fund for Southeast Europe (EFSE), a Luxembourg-based microfinance investment vehicle (MIV), has disbursed a loan of EUR 15 million (USD 20.4 million) to ProCredit Bank Serbia, a financial institution that focuses on lending to micro-, small and medium-sized enterprises (MSMEs) and is majority-owned by Germany-based ProCredit Holding. ProCredit Bank Serbia intends to use the funds to expand long-term financing to small and medium-sized enterprises (SMEs). Information regarding the terms of the loan has not been released.

As of 2012, ProCredit Bank Serbia reported to the US-based nonprofit data provider Microfinance Information Exchange (MIX) total assets of USD 796 million, a gross loan portfolio of USD 605 million, a return on equity (ROE) of 16.9 percent and return on assets (ROA) of 2.75 percent. Information on the number of depositors and borrowers is not available at this time. As of September 2013, ProCredit Holding reported that its 21 subsidiaries held total assets of EUR 5.8 billion (USD 7.6 billion), a gross loan portfolio of EUR 4.2 billion (USD 5.6 billion), customer deposits of EUR 3.6 billion (USD 4.7 billion) and ROE of 9.4 percent. As of June 2013, EFSE has an investment portfolio of EUR 774 million (USD 1 billion).

By Meraj Husain, Research Associate

About ProCredit Bank Serbia

ProCredit Bank Serbia is branded as a “development-oriented” bank. It is one of 21 units of ProCredit Holding, a private firm established in 1998 and headquartered in Frankfurt, Germany. ProCredit Bank Serbia began operations in 2001 and focuses on lending to micro-, small and medium-sized enterprises (MSMEs). As of 2012, ProCredit Bank Serbia reported to the US-based nonprofit data provider Microfinance Information Exchange (MIX) total assets of USD 796 million, a gross loan portfolio of USD 605 million, a return on equity (ROE) of 16.9 percent and a return on assets (ROA) of 2.75 percent. Information on the number of depositors and borrowers is not available at this time.

About ProCredit Holding

Germany’s ProCredit Holding consists of 21 banks operating in developing countries in Eastern Europe, Latin America and Africa. It provides credit and other banking services to small and medium-sized enterprises and lower- and middle-income savers who have previously had limited access to formal financial services. As of September 2013, ProCredit reported total assets of EUR 5.8 billion (USD 7.6 billion), a gross loan portfolio of EUR 4.2 billion (USD 5.6 billion), customer deposits of EUR 3.6 billion (USD 4.7 billion) and return on equity (ROE) of 9.4 percent.

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 (known by its German acronym BMZ), 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 1 billion). 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] EFSE expands partnership with ProCredit Bank Serbia,” http://www.efse.lu/Details—2014-02-11-EFSE-expands-partnership-with-ProCredit-Bank-Serbia——_nav._siteid.134_entryid.522_dir._likecms.html

[2] ProCredit Holding: “Condensed Consolidated Interim Financial Statements,” http://www.procredit-holding.com/images/documents/Financials/ProCredit_Holding_CIFS_2013_Q3.pdf

[3] ProCredit Holding: “Annual Report 2012,” http://www.procredit-holding.com/images/documents/Financials/ProCredit_Holding_AR_2012.pdf

MicroCapital, October 31, 2013, “European Fund of Southeast Europe (EFSE) Loans $31m to Komercijalna Banka Beograd of Serbia, Microfinance Institution Patria Credit of Romania,” https://www.microcapital.org/microcapital-brief-european-fund-for-southeast-europe-efse-loans-31m-to-komercijalna-banka-beograd-of-serbia-microfinance-institution-patria-credit-of-romania/

MicroCapital, April 25, 2013, “ProCredit Bank Bulgaria Launches Home Loan Program,” https://www.microcapital.org/microcapital-brief-procredit-bank-bulgaria-launches-home-loan-program/

MicroCapital, December 22, 2011, “European Bank for Reconstruction and Development Arranges $9m Syndicated Loan for Microfinance Institution Mol Bulak Finance of Kyrgyz Republic Largely Funded by FMO, Loans $39m to ProCredit Bank Serbia” https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-arranges-9m-syndicated-loan-for-microfinance-institution-mol-bulak-finance-of-kyrgyz-republic-largely-funded-by-fmo-loans-39m-to/

MicroCapital Universe Profile: ProCredit Bank Serbia https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=procredit+bank+serbia

MicroCapital Universe Profile: Procredit Holding https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Procredit+Holding

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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