MICROCAPITAL BRIEF: European Fund for Southeast Europe (EFSE) Loans $4.2m to Agricultural Cooperative Bank of Armenia (ACBA) Leasing for On-lending to Micro-, Small Enterprises

The European Fund for Southeast Europe (EFSE), a Luxembourg-based microfinance investment vehicle (MIV), recently announced that it is disbursing a senior loan of EUR 3.4 million (USD 4.17 million) to Agricultural Cooperative Bank of Armenia (ACBA) Leasing, a subsidiary of ACBA, for on-lending to micro- and small enterprises (MSEs). This loan is intended to focus on supporting agricultural clients and other MSEs in Armenia.

According to Monika Beck, the Chairperson of the Board of EFSE, “ACBA Leasing is an important partner in terms of increasing the EFSE’s impact and outreach in Armenia. We are therefore confident this new loan will support the further development of MSEs in Armenia in a sustainable and responsible way.”

According to Arsen Bazikyan, the General Manager of ACBA Leasing, “From the view of attracting new resources, the agreement with the EFSE also reinforces ACBA Leasing’s strategy of remaining an independent institution with a diversified loan portfolio. To address the scope of requirements from potential customers, ACBA Leasing is looking to provide specialized leasing services, including purchasing, shipping, customs clearance and insurance for goods and equipment to be leased. The experience gained from successfully distributing funds provided under previous loan agreements enables us to keep up the momentum as well as maximise both impact and efficiency.”

ACBA Leasing, which finances the acquisition of machinery and equipment, does not report to the US-based nonprofit (MIX), and financial data on the subsidiary is not otherwise available. As of December 31, 2013, ACBA reported total assets of AMD 267.7 billion (USD 656.4 million), total deposits of AMD 107.8 billion (USD 264.5 million) and a gross loan portfolio of AMD 172.6 billion (USD 423.2 million). As of June 2013, EFSE has an investment portfolio of EUR 774 million (USD 1 billion).

By Ananya Tiwari, Research Associate

About ACBA Leasing

Established in 2003, Agricultural Cooperative Bank of Armenia (ACBA) Leasing is a subsidiary of ACBA, a regulated bank in Armenia. ACBA Leasing finances the acquisition of machinery and fixed assets such as equipment for engineering, agriculture, medical procedures, transportation and service businesses. Leasing contracts can last up to 60 months with annual interest rates ranging from 12 percent to 18 percent. ACBA Leasing does not report financial information to the Microfinance Information Exchange (MIX), a microfinance information US-based nonprofit offering.

About European Fund for Southeast Europe (EFSE)

The European Fund for Southeast Europe (EFSE) was established in 2005 by Kreditanstalt für Wiederaufbau Entwicklungsbank (KfW), a German development bank, with financial support from the German Federal Ministry for Economic Cooperation and Development (Bundesministerium für wirtschaftliche Zusammenarbeit und Entwicklung) and the European Commission of the EU. 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 2014, 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 Press Release, http://www.efse.lu/Press-releases—Details—2014-12-18-EFSE-and-ACBA-Leasing-expand-partnership-to-support-micro-and-small-enterprises-in-Armenia——_nav.52_siteid.134_entryid.574_dir._likecms.html

MicroCapital, November 13, 2014, European Fund for Southeast Europe (EFSE) Provides $12.5m to Fibabanka of Turkey to Support Small, Medium-Sized Enterprises (SMEs), https://www.microcapital.org/microcapital-brief-european-fund-for-southeast-europe-efse-provides-12-5m-to-fibabanka-of-turkey-to-support-small-medium-sized-enterprises-smes/

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 Story, July 14, 2011, “responsAbility Loans $24m to Microfinance Institutions (MFIs) Inecobank, Agricultural Cooperative Bank of Armenia (ACBA), ACBA Leasing all of Armenia; DemirBank of Azerbaijan; Sekerbank of Turkey,” https://www.microcapital.org/microcapital-brief-responsability-loans-24m-to-microfinance-institutions-mfis-inecobank-agricultural-cooperative-bank-of-armenia-acba-acba-leasing-all-of-armenia-demirbank-of-azerbaijan-seke/

MicroCapital Universe Profile, Agricultural Cooperative Bank of Armenia (ACBA) Leasing, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=ACBA+Leasing

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

MicroCapital Universe Profile: Agricultural Cooperative Bank of Armenia (ACBA) Credit Agricole Bank, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=ACBA

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