MICROCAPITAL BRIEF: 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

The European Fund for Southeast Europe (EFSE), a Luxembourg-based government-backed investor in microfinance, has loaned a total of EUR 7 million (USD 9.3 million) to Mikrofin Banja Luka, a microfinance institution based in Bosnia and Herzegovina, and MF Banka, a subsidiary of Mikrofin formed in 2010, for on-lending to micro- and small enterprises (MSEs) in rural areas. [1]

Mikrofin Banja Luka will use EUR 4 million (USD 5.3 million) of the loan to fund rural households and agricultural projects in Bosnia and Herzegovina, and MF Banka will loan the remaining EUR 3 million (USD 4 million) to MSEs in the country.

As of 2012, EFSE has an outstanding investment portfolio of EUR 723 million (USD 885 million) and a total of EUR 834 million (USD 1.1 billion) in assets. As of 2011, Mikrofin reported to the US-based nonprofit data provider Microfinance Information Exchange (MIX) total assets of USD 127 million, a gross loan portfolio of USD 103 million, return on assets (ROA) of 1.11 percent, return on equity (ROE) of 4.18 percent and 36,562 active borrowers. The institution does not accept deposits. Financial information for MF Banka is not available.

By Meghan Gillis, Research Associate

About Mikrofin Banja Luka

Mikrofin Banja Luka, established in 1999, is a microfinance institution (MFI) 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.” As of 2011, Mikrofin reported to the US-based nonprofit data provider Microfinance Information Exchange (MIX) total assets of USD 127 million, a gross loan portfolio of USD 103 million, return on assets (ROA) of 1.11 percent, return on equity (ROE) of 4.18 percent and 36,562 active borrowers. Mikrofin does not accept deposits. Financial information for MF Banka is not available.

About the European Fund for Southeast Europe (EFSE)

Established in 2005, the European Fund for Southeast Europe (EFSE) aims to foster 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 was initiated by Kreditanstalt für Wiederaufbau Entwicklungsbank, a German development bank, with support from the German Federal Ministry for Economic Cooperation and Development (known by the German Acronym BMZ) and the European Commission. 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 March 2012, EFSE has an outstanding investment portfolio of EUR 723 million (USD 885 million) and a total of EUR 834 million (USD 1.1 billion) in assets. As of 2012, EFSE holds a label from the Luxembourg Fund Labelling Agency (LuxFLAG), an organization that certifies that microfinance investment vehicles actually invest in the microfinance sector.

Sources and Additional Resources

[1] European Fund for Southeast Europe: “EFSE boosts Mikrofin group’s rural and MSE lending activities with credit lines totalling EUR 7 million,” http://www.efse.lu/Details—2013-06-06-EFSE-boosts-Mikrofin-group—s-rural-and-MSE-lending-activities-with-credit-lines-totalling-EUR-7-million——_nav._siteid.134_entryid.475_dir._likecms.html

MicroCapital brief, June 14, 2013, “MICROCAPITAL BRIEF: European Fund for Southeast Europe (EFSE) Loans $13m to Newly Launched Sberbank BH of Bosnia and Herzegovina for Housing, Micro- and Small Enterprise (MSE),” https://www.microcapital.org/microcapital-brief-european-fund-for-southeast-europe-efse-loans-13m-to-newly-launched-sberbank-bh-of-bosnia-and-herzegovina-for-housing-micro-and-small-enterprise-mse/

MicroCapital brief, June 11, 2013, “MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) Considers $33m Loans to European Fund for Southeast Europe (EFSE) for Micro-, Small, Medium-Sized Enterprises,” https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-considers-33m-loan-to-european-fund-for-southeast-europe-efse-for-micro-small-medium-sized-enterprises/

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: Mikrofin Banja Luka

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Mikrofin+Banja+Luka

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