The European Fund for Southeast Europe (EFSE), a Luxembourg-based microfinance investment vehicle (MIV), recently announced that it will disburse a loan of USD 3 million to Joint Stock Company Microfinance Organization Crystal, a microfinance institution based in Kutaisi, Georgia. Crystal plans to on-lend the funds to small-scale agricultural producers and rural microenterprises. It is anticipated that approximately 4,500 microloans will be made available. In addition, EFSE will offer technical assistance to Crystal for capacity building in corporate governance, management and entrepreneurship skills for young people.
Ms Monika Beck, the chairperson of the board of EFSE, said that “with its clear commitment to the EFSE’s final target group and a strong focus on agriculture, Crystal MFI is a perfect fit to build further momentum in our mission to provide much-needed financing to entrepreneurs in the more remote areas of our target countries”[1]. Malkhaz Dzadzua, the chief executive officer of Crystal, added that “[…] the technical assistance provided by the EFSE Development Facility will be instrumental in improving our corporate governance and management capacity, and will enable us to deliver better and more targeted services to rural micro-entrepreneurs and smallholder farmers”[1].
As of 2014, EFSE reported a gross loan portfolio of EUR 940.5 million (approximately USD 1 billion). As of December 2015, Crystal has USD 50 million in assets and a gross loan portfolio of USD 40 million serving 44,000 active borrowers, 65 percent of whom are located in rural areas of the country. Crystal does not accept deposits.
By Alíz Crowley, Research Associate
About Joint Stock Company Microfinance Organization Crystal
Previously known as the Crystal Fund, Joint Stock Company Microfinance Organization Crystal is a microfinance institution (MFI) that was established in Tbilisi, Georgia, in 1998. Crystal was started with the aim of reducing poverty by providing financial services to low-income citizens. It was commercialized in 2007 and registered with the National Bank of Georgia after the country’s passing of a new law on microfinance in 2006. As of 2015, Crystal offers microfinance services primarily for smallholder agricultural producers and microenterprises that are located in rural areas of the country. Crystal is headquartered in Kutaisi as of 2015, and it has a network of 30 branches. As of December 2015, the MFI has USD 50 million in assets and a gross loan portfolio of USD 40 million serving 44,000 active borrowers, 65 percent of whom are located in rural areas of the country. Crystal does not accept deposits.
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.
Sources and Additional Resources
[1] European Fund for Southeast Europe, News, EFSE and Crystal MFI to support rural entrepreneurs in Georgia
[2] Joint Stock Company Microfinance Organization Crystal, About Us
MicroCapital Universe Profile: Joint Stock Company Microfinance Organization Crystal
MicroCapital Universe Profile: European Fund for Southeast Europe (EFSE)
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