MICROCAPITAL BRIEF: European Fund for Southeast Europe (EFSE) Loans $6.8m to MF Banka a.d. Banja Luka of Bosnia and Herzegovina for On-lending to Micro-, Small Enterprises

The European Fund for Southeast Europe (EFSE), a Luxembourg-based microfinance investment vehicle, has disbursed a senior loan of EUR 5 million (USD 6.8 million) to MF Banka a.d. Banja Luka, a microfinance institution (MFI) in Bosnia and Herzegovina. MF Banja Luka intends to use the funds to expand its lending to micro- and small enterprises. The funds are also expected to bolster MF Banja Luka’s “long-term” lending capacity.

MF Banja Luka was established in 2007 and is majority-owned by Mikrofin Banja Luka, an MFI in Bosnia and Herzegovina. Mikrofin was established in 1997 and reported total assets of BAM 180 million (USD 126 million, a gross loan portfolio of BAM 137 million (USD 96 million), 64 branches and 44,700 customers as of March 2014. While Mikrofin does not offer deposit accounts, MF Banka a.d. Banja Luka does accept deposits. As of June 2013, EFSE has an investment portfolio of EUR 774 million (USD 1 billion).

By Meraj Husain, Research Associate

About Mikrofin Banja Luka

Mikrofin Banja Luka, established in 1997, is a microfinance institution based in Bosnia and Herzegovina. It aims to “provide appropriate financial services to economically-active, low-income people that can make a profit and make it possible for them to become economically independent.” Mikrofin has a majority stake in MF Banka a.d. Banja Luka, an MFI in Bosnia and Herzegovina that was established in 2007. As of March 2014, Mikrofin reported total assets of BAM 180 million (USD 126 million, a gross loan portfolio of BAM 137 million (USD 96 million), 64 branches and 44,700 customers. While Mikrofin does not offer deposit accounts, MF Banka a.d. Banja Luka does accept deposits.

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 adviser. As of June 2013, EFSE has an investment portfolio of EUR 774 million (USD 1 billion). As of 2013, EFSE holds a microfinance label from Luxembourg Fund Labeling Agency (LuxFLAG), a non-governmental organization that certifies that social investment vehicles actually invest as advertised.

Sources and Additional Resources

[1] European Fund for Southeast Europe: EUR 5 Million Loan from EFSE Enhances MF Banka’s Long-Term Lending Capabilities

MicroCapital, February 11, 2014, European Fund for Southeast Europe (EFSE) Loans $4m to Komercijalna Banka Banja Luka of Bosnia and Herzegovina

MicroCapital, July 17, 2013, European Fund for Southeast Europe (EFSE) Loans $9.3m to Mikrofin Banja Luka, MF Banka of Bosnia and Herzegovina for Micro- and Small Enterprise (MSE) in Rural Areas

MicroCapital, October 14, 2012, MF Banka Receives $5.2m from European Bank of Reconstruction and Development for Small Businesses in Bosnia, Herzegovina

MicroCapital, July 10, 2012, European Fund for Southeast Europe Loans $8m to MF Banka a.d. Banja Luka, Microcredit Foundation EKI of Bosnia and Herzegovina

MicroCapital Universe Profile: Mikrofin Banja Luka

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

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