The European Fund for Southeast Europe (EFSE), a Luxembourg-based microfinance investment vehicle (MIV), recently issued a senior loan of EUR 5 million (USD 6.2 million) to Alter Modus, a Montenegro-based microfinance institution (MFI), for lending to micro- and small enterprises (MSEs) within Montenegro. Alter Modus historically has made loans of up to EUR 10,000 (USD 12,300) with average loans sizes of around EUR 1,500 (USD 1,800). The loan from EFSE is intended to enable Alter Modus to tap into market for disbursing loans of up to EUR 30,000 (USD 37,000) with “longer” maturities.
According to Monika Beck, the Chairperson of the Board of EFSE, “With its clear focus on micro- and small enterprises and an outstanding track record that spans 15 years, Alter Modus has always been a valuable and effective ally in fostering economic development and prosperity in Montenegro. Alter Modus has consistently proved able to cope with challenging circumstances as well as adapt to a changing environment, and thus become a close and trusted partner to the EFSE.”
According to a statement attributed to Luka Djurovic, the Executive Director of Alter Modus, “Alter Modus and the European Fund for Southeast Europe have been cooperating successfully for many years now. The EFSE is our strategic partner and we work together on identifying market needs and providing opportunities for turning entrepreneurial ideas into successful businesses. The new loan agreement comes at the right time, as an additional financial injection in our market it will enable the creation and the continued growth of a number of enterprises.”
As of 2013, Alter Modus reported assets totaling EUR 16.9 million (USD 20.8 million), liabilities totaling EUR 9 million (USD 11 million), equity totaling EUR 7.9 million (USD 9.7 million), gross loan portfolio of EUR 15.5 million (USD 19.2 million), 11,170 active clients, 9,880 issued loans, and EUR 17.1 million (USD 21.2 million) in issued loans. As of June 2013, EFSE has an investment portfolio of EUR 774 million (USD 1 billion).
By Ananya Tiwari, Research Associate
About Alter Modus
Alter Modus is a Montenegro-based microfinance institution (MFI) that specializes in issuing micro- and small loans. The MFI was founded in 1997 as a nongovernmental organization designed to provide microfinance loans across various industries in Montenegro. As of 2014, Alter Modus has 15 branches throughout Montenegro. As of 2013, Alter Modus reported assets totaling EUR 16.9 million (USD 20.8 million), liabilities totaling EUR 9 million (USD 11 million), equity totaling EUR 7.9 million (USD 9.7 million), gross loan portfolio of EUR 15.5 million (USD 19.2 million), 11,170 active clients, 9,880 issued loans, and EUR 17.1 million (USD 21.2 million) in issued loans.
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] Press release sent to MicroCapital by European Fund for Southeast Europe (EFSE)
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 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: Alter Modus, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Alter+Modus
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