MICROCAPITAL BRIEF: European Fund for Southeast Europe (EFSE) Loans $22m to Odeabank to On-Lend to Micro-, Small Enterprises (MSEs) in Turkey

The European Fund for Southeast Europe (EFSE), a Luxembourg-based fund that invests in the development of Southeast Europe and Central Asia’s financial sectors, recently provided Odeabank, a private deposit bank in Turkey, a loan of EUR 20 million (USD 21.86 million) to on-lend to micro and small-sized enterprises (MSEs) in Turkey [1]. This is the first loan that EFSE has issued to Odeabank.

Alpaslan Yurdagül, Odeabank’s Assistant General Manager for Financial Institutions and Investment Banking, stated that this investment in MSEs is important in “improving entrepreneurship culture in Turkey and” making considerable “contributions to employment rates of women”[1].

As of 2015, Odeabank reported total assets of TRY 32.8 billion (USD 11.2 billion), an aggregate loan portfolio of TRY 21.9 billion (USD 7.5 billion) and deposits of TRY 26.2 billion (USD 8.97 billion). It is a unit of Lebanon’s Bank Audi, which has operations in 12 countries and total assets of LBP 63.9 trillion (USD 42.4 billion) as of September 2015. As of 2014, EFSE reported a gross loan portfolio of EUR 940.5 million (approximately USD 1 billion). As of 2015, EFSE invests in approximately 70 partner lending institutions.

By Hye In Arielle Oh, Research Associate

About Odeabank

Odeabank is a private deposit bank in Turkey that was established on October 2, 2012, as a subsidiary of Bank Audi, a Lebanon-based bank with operations in 12 countries and total assets of LBP 63.9 trillion (USD 42.4 billion) as of September 2015.  Odeabank operates 54 branches in 14 cities and employs approximately 1,500 employees. As of 2015, Odeabank reported total assets of TRY 32.8 billion (USD 11.2 billion), an aggregate loan portfolio of TRY 21.9 billion (USD 7.5 billion) and deposits of TRY 26.2 billion (USD 8.97 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 2015, EFSE holds a microfinance label from Luxembourg Fund Labeling Agency (LuxFLAG), an NGO that certifies that social investment vehicles actually invest as advertised.

About Bank Audi

Bank Audi was founded in 1830 and was incorporated in its present state as a private joint stock company in 1962. Bank Audi is headquartered in Beirut, Lebanon, and operates in 12 countries with 81 branches (76 operating) throughout the country as well as 133 branches through foreign subsidiaries located mainly in the Middle East and North Africa (MENA) as of September 2015. The bank’s main activities include commercial, retail and private banking. As of September 2015, Bank Audi reported LBP 63.9 trillion (USD 42.4 billion) in total assets and customers’ deposits of LBP 53 trillion (USD 35.2 billion).

Sources and Additional Resources:

[1] European Fund for Southeast Europe, “Odeabank in Turkey joins EFSE’s network of partner lending institutions,”http://www.efse.lu/news-events/news/detail/odeabank-in-turkey-joins-efses-network-of-partner-lending-institutions/

[2] European Fund for Southeast Europe, “Investments,” http://www.efse.lu/about-the-fund/investments/

[3] Bank Audi Group, “Introduction,” http://www.bankaudigroup.com/group/introduction

MicroCapital Universe, “Odeabank,” https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Odeabank

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

MicroCapital Universe, “Bank Audi,” https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Bank+Audi

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