MICROCAPITAL BRIEF: European Fund for Southeast Europe (EFSE) Loans $5m to Opportunity Bank Serbia for On-Lending to Micro-, Small Enterprises; Low-Income Households in Rural Serbia

The European Fund for Southeast Europe (EFSE), a Luxembourg-based microfinance investment vehicle (MIV), recently announced that it will loan EUR 5 million (USD 5.4 million) to Opportunity Bank Serbia (OBS), a branch of US-based microfinance network Opportunity International, to improve access to finance for micro -and small enterprises (MSEs) and low-income households in rural areas of Serbia.

“Opportunity has an excellent outreach to the EFSE target group of MSEs and low-income households,” says Monika Beck, Chairperson of the Board of EFSE.

“EFSE has been Opportunity Bank’s long-term partner and has provided crucial support to the Bank, thus enabling us to spread our outreach to clients that have difficulties accessing loans, such as low-income households in remote areas of Serbia, “ said the OBS Board President, Vladimir Vukotic.

As of the end of 2014, OBS reported total assets of USD 106 million, EUR 65 million (USD 73.3 million) in loans outstanding to 28,000 clients and EUR 54 million (USD 60.1 million) in deposits from 15,600 clients. In addition, OBS reported return on assets (ROA) of 1.5 percent and return on equity (ROE) of 9.6 percent. As of 2015, Opportunity International has served 12 million clients in 28 countries. As of the end of 2014, EFSE reported a gross loan portfolio of EUR 940.5 million (approximately USD 1 billion) divided over 16 countries in Southeast Europe and parts of Central Asia.

By Kevin van den Brink, Research Associate

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 by providing “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 to support capacity building within these partner institutions. EFSE was established in 2005 by German development bank Kreditanstalt für Wiederaufbau (KfW), with the financial support of the EU’s European Commission and the German Federal Ministry for Economic Cooperation and Development (which is also known by its German acronym BMZ). 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, Turkey and the Former Yugoslav Republic of Macedonia. As of 2014, EFSE reported a gross loan portfolio of EUR 941 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 Opportunity Bank Serbia

Opportunity Bank Serbia is a deposit-taking microfinance institution that was founded in 2002. OBS offers loans, insurance, current accounts and savings accounts to private individuals. It also offers loans to small businesses. OBS is a member of Opportunity International, a network of banks and microfinance institutions (MFIs) that was founded in the US city of Chicago in 1971. As of the end of 2014, OBS reported a gross loan portfolio of EUR 65 million (USD 73.3 million) outstanding to 28,000 loan clients and EUR 54 million (USD 60.1 million) in deposits from 15,600 savings clients. In 2013, it reported total assets of USD 106 million. In addition, OBS reported return on assets (ROA) of 1.5 percent and return and equity (ROE) of 9.6 percent.

About Opportunity International

Founded in 1971, Opportunity International is a nonprofit organization that provides loans, savings, insurance and training to 12 million individuals in 28 countries in Africa, Asia, Europe and Latin America. Based in the US city of Chicago, Opportunity International also has administrative offices in Australia, Canada, Germany, Hong Kong, Singapore, Switzerland and the UK. As of December 2014, Opportunity International reported USD 1 billion in assets, return on assets (ROA) of 0.7 percent and return on equity (ROE) of 3.3 percent. Opportunity International works toward the goal of creating 20 million jobs by 2020.

Sources and Additional Resources

[1] European Fund for Southeast Europe, News, http://www.efse.lu/news-events/news/detail/efse-and-opportunity-to-improve-access-to-finance-in-the-rural-areas-of-serbia/

MicroCapital Universe Profile: European Fund for Southeast Europe (EFSE)

MicroCapital Universe Profile: Opportunity Bank Serbia

MicroCapital Universe Profile: Opportunity International

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