MICROCAPITAL BRIEF: European Fund for Southeast Europe (EFSE) Loans $600k to Macedonian Microfinance Institution (MFI) Horizonti to On-Lend to Small-Scale Farmers, Rural Microentrepreneurs

The European Fund for Southeast Europe (EFSE), a Luxembourg-based microfinance investment vehicle (MIV), recently announced it will offer a senior loan of EUR 500,000 (USD 600,100) to the Foundation for Economic Development “Horizonti”, Skopje (Horizonti), a Macedonian microfinance institution (MFI). The proceeds of the loan, which is EFSE’s first to Horizonti, will be on-lent to small-scale farmers and microentrepreneurs working in rural areas of Macedonia. EFSE will also offer “hands-on technical assistance”[1] to Horizonti, which is intended to help the organization improve its product development and financing expertise.

Ms Monika Beck, the chairperson of the board of EFSE, said that “the mission of Horizonti and that of the EFSE are in complete alignment. With its declared mission to support a low-income but economically active segment of the population, Horizonti represents a valuable addition to our network of partner lending institutions and takes us a major step forward in fulfilling our mission of fostering economic development and prosperity”[1]. Mr Vasil Davaliev, the executive director of Horizonti, added that “for Horizonti, the cooperation with the EFSE means much more than additional funding for portfolio growth. We consider the EFSE as a strategic partner for our further institutional development. We truly rely on the EFSE’s expertise and count on long-term support to reach and service more clients in an efficient way”[1].

As of June 2013, EFSE had an investment portfolio of EUR 774 million (USD 1 billion). As of 2013, Horizonti reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 4.6 million, a gross loan portfolio of USD 4.2 million, approximately 2,900 borrowers, return on assets (ROA) of 2.59 percent and return on equity (ROE) of 4.98 percent. The organization does not accept deposits.

By Alíz Crowley, Research Associate

About Foundation for Economic Development “Horizonti”, Skopje

Horizonti started as a microfinance program of the US-based non-governmental organization (NGO) Catholic Relief Services in 2000 and then registered as an independent NGO in 2005. It provides low-income populations in Macedonia group and individual business loans for microenterprises that operate in the retail, services, production and agriculture sectors. Additionally, Horizonti offers small housing-repair loans. Its client base constitutes 97 percent female borrowers. As of 2014, Horizonti’s head office is located in Skopje, the capital city of Macedonia, and it has eight branches in the country. As of 2013, Horizonti reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 4.6 million, a gross loan portfolio of USD 4.2 million, approximately 2,900 borrowers, return on assets (ROA) of 2.59 percent and return on equity (ROE) of 4.98 percent. The organization does not accept deposits.

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] European Fund for Southeast Europe (EFSE), Press Releases, Horizonti joins the EFSE’s network of partner lending institutions

MicroCapital, December 30, 2014, European Fund for Southeast Europe (EFSE), Green for Growth Fund (GGF) Loan $24.2m to Macedonia-based Halkbank AD Skopje to Support Energy Efficiency; Housing; Micro-, Small Enterprises (MSEs)

MicroCapital, December 19, 2014, European Fund for Southeast Europe (EFSE) Loans $4.2m to Agricultural Cooperative Bank of Armenia (ACBA) Leasing for On-lending to Micro-, Small Enterprises

MicroCapital, December 9, 2014, European Fund for Southeast Europe (EFSE) Loans $6.2m to Alter Modus for Disbursal as Micro-, Small Loans in Montenegro

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

MicroCapital Universe Profile: Foundation for Economic Development “Horizonti”, Skopje

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