MICROCAPITAL BRIEF: European Fund for Southeast Europe (EFSE) Loans $4m to Komercijalna Banka Banja Luka of Bosnia and Herzegovina

The European Fund for Southeast Europe (EFSE), a Luxembourg-based microfinance investment vehicle (MIV), has disbursed a senior loan of EUR 3 million (USD 4.1 million) to Komercijalna Banka Banja Luka, a financial institution that is owned by Serbia-based commercial bank Komercijalna Banka Beograd. Komercijalna Banka Banja Luka intends to use the funds to expand loan services to micro- and small enterprises (MSEs). Information regarding the terms of the loan has not been released.

While Komercijalna Banka Banja Luka has equity capital of BAM 60 million (USD 42 million), additional financial information for the bank is not available. As of 2012, Komercijalna Banka Beograd reported total assets of USD 3.77 billion, return on assets (ROA) of 1.5 percent and return on total capital of 9.4 percent. It has 40 branch offices and 250 sub-branches in Bosnia and Herzegovina, Montenegro, and Serbia. Komercijalna Banka Beograd is owned by the government of Serbia, UK-based European Bank for Reconstruction and Development (EBRD), the World Bank’s private investment arm International Finance Corporation (IFC), German development finance institution Deutsche Investitions- und Entwicklungsgesellschaft (DEG), Swedish risk capital company Swedfund International and other unnamed investors. As of June 2013, EFSE has an investment portfolio of EUR 774 million (USD 1 billion).

By Meraj Husain, Research Associate

About Komercijalna Banka Banja Luka

Komercijalna Banka Banja Luka is a financial institution that was founded in 2006 and operates in Bosnia and Herzegovina. Komercijalna Banka Beograd of Serbia is the majority shareholder in Komercijalna Banka Banja Luka, with 99.9-percent of the bank’s equity capital of BAM 60 million (USD 42 million). Additional financial information for Komercijalna Banka Banja Luka is not available.

About Komercijalna Banka Beograd

Komercijalna Banka is a commercial bank that was established in Belgrade, Serbia, in 1970. It also operates in Bosnia and Herzegovina through its subsidiary Komercijalna banka Banja Luka and in Montenegro through Komercijalna banka Budva. The government of Serbia owns 41 percent of the bank, UK-based multilateral institution European Bank for Reconstruction and Development (EBRD) owns 24 percent; the World Bank’s International Finance Corporation owns 10 percent; Deutsche Investitions- und Entwicklungsgesellschaft (DEG), a subsidiary of German government-owned development bank Kreditanstalt für Wiederaufbau (KfW) owns 5 percent; Swedfund International, a Swedish government-owned risk capital company owns 2 percent; and the remainder of the bank’s shares are owned by unnamed investors. As of 2012, Komercijalna Banka Beograd reported total assets of USD 3.77 billion, return on assets (ROA) of 1.5 percent and return on total capital of 9.4 percent. It has 40 branch offices and 250 sub-branches in Bosnia and Herzegovina, Montenegro, and Serbia.

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 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] European Fund for Southeast Europe: “Komercijalna Banka a.d. Banja Luka to expand its MSE lending business,” http://www.efse.lu/media/pdfs/press-releases/2014/2014-01-efse-grants-accessbank-in-azerbaijan-usd-15-million-senior-loan.pdf

[2] Komercijalna Banka Beograd: “Annual Report 2012,” http://www.kombank.com/pdf/godisnji_2012e.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,” http://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, July 10, 2013, “European Bank for Reconstruction and Development Loans $10m to Partner Microcredit Foundation of Bosnia and Herzegovina,” http://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-loans-10m-to-partner-microcredit-foundation-of-bosnia-and-herzegovina/

MicroCapital, July 15, 2012, “Green for Growth Fund Loans $30.6m to Partner Foundation of Bosnia and Herzegovina, Komercijalna Banka Beograd of Serbia,” http://www.microcapital.org/microcapital-brief-green-for-growth-fund-loans-30-6m-to-partner-microcredit-foundation-of-bosnia-and-herzegovina-komercijalna-banka-beograd-of-serbia/

MicroCapital Universe Profile: Komercijalna Banka http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Komercijalna+Banka

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

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