The European Fund for Southeast Europe (EFSE), a Luxembourg-based microfinance investment vehicle (MIV), recently announced that it will disburse a senior loan equivalent to EUR 7 million (USD 8.3 million) but denominated in Romanian leu to Patria Credit IFN SA (Non-banking Financial Institution Corporation), a microfinance institution (MFI) in Romania. The aim of the loan is to fund small business ventures, microenterprises and small-scale farmers located in rural areas of Romania.
Ms Monika Beck, the chairperson of the board of EFSE, said that “Patria Credit became a partner lending institution shortly after the EFSE’s foundation and has proved a valuable partner ever since”[1]. She added that “Patria Credit has consistently succeeded in efficiently placing our loan facilities, thus supporting the EFSE’s mission of fostering the development of [small and medium-sized enterprises] in Romania”[1]. Mr Bogdan Merfea, the general manager of Patria Credit, said that “the EFSE funding received by Patria Credit IFN SA demonstrates the international financial institutions’ trust in our development potential and contributes to the achievement of our strategic plans to finance those clients with limited access to credit in terms of geographic location and financial situation. We appreciate the role of the EFSE in encouraging and supporting agricultural producers so they can grow and achieve their full potential. Our own growth in recent years shows that these market segments are dynamic and need microcredit products to cover their development needs and keep growing their business”[1].
As of June 2013, EFSE had an investment portfolio of EUR 774 million (USD 1 billion). Between 2006 and 2014 Patria Credit benefitted from funding from EFSE valued at EUR 13.9 million (USD 16.6 million). As of September 30, 2014, Patria Credit reported total assets of USD 88.8 million, a gross loan portfolio of USD 79.5 million, approximately 7,200 active borrowers, return on assets of 12.04 percent and return on equity of 37.78 percent. Patria Credit does not accept deposits. Shareholders of Patria Credit include the Romanian American Investment Foundation and the Balkan Accession Fund.
By Alíz Crowley, Research Associate
About Patria Credit
Patria Credit IFN SA (Non-banking Financial Institution Corporation), formerly known as Capa Finance, was founded in 1998 in Romania. The organization is a non-banking microfinance institution (MFI) that provides financial services to micro- and small enterprises, agricultural producers and individual entrepreneurs through its 36 offices. As of September 30, 2014, Patria Credit reported total assets of USD 88.8 million, a gross loan portfolio of USD 79.5 million, approximately 7,200 active borrowers, return on assets of 12.04 percent and return on equity of 37.78 percent. Patria Credit does not accept deposits. Shareholders of Patria Credit include the Romanian American Investment Foundation and the Balkan Accession Fund.
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), News, Press Releases, EFSE grants Patria Credit EUR 7 million in local currency
MicroCapital, January 5, 2015, European Fund for Southeast Europe (EFSE) Loans $600k to Macedonian Microfinance Institution (MFI) Horizonti to On-Lend to Small-Scale Farmers, Rural Microentrepreneurs
MicroCapital, January 4, 2015, European Fund for Southeast Europe (EFSE) Loans $30m to Finansbank of Turkey to Support Micro-, Small, Medium-sized Enterprises (MSMEs)
MicroCapital, October 31, 2013, European Fund for Southeast Europe (EFSE) Loans $31m to Komercijalna banka Beograd of Serbia, Microfinance Institution Patria Credit of Romania
MicroCapital Universe Profile: European Fund for Southeast Europe (EFSE)
MicroCapital Universe Profile: Patria Credit
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