MICROCAPITAL BRIEF: European Fund for Southeast Europe (EFSE) Provides $5.1m to Byblos Bank Armenia to Increase Microfinance Lending

The European Fund for Southeast Europe (EFSE), a Luxembourg-based investment vehicle that mobilizes capital for microfinance institutions (MFIs), has agreed to issue a loan equivalent to EUR 3.9 million (USD 5.1 million) to Byblos Bank Armenia, an Armenian financial institution with total assets of AMD 36 billion (USD 93.5 million). An unspecified portion of the loan will be denominated in US dollars and the remainder will be issued in Armenian drams. Byblos Bank plans to use the funds to grow its pool of credit for microenterprises in Armenia. The local-currency portion of the loan reduces the currency-exchange risk that would otherwise be passed on to participating microenterprises.

Byblos Bank Armenia reported a net profit of AMD 330 million (USD 855,000) for the first nine months of 2011. For the year 2010, EFSE reported total assets of approximately USD 681 million with a gross loan portfolio of USD 647 million.

About Byblos Bank Armenia
A unit of Lebanon’s Byblos Bank Group, Byblos Bank Armenia is a financial institution headquartered in Yerevan, Armenia. It offers loans, deposits and other financial services to commercial and retail banking clients. It reported total assets of AMD 36 billion (USD 93.5 million) as of September 2011 and a net profit of AMD 330 million (USD 855,000) for the first nine months of 2011.

About the European Fund for Southeast Europe
Established in 2005, the European Fund for Southeast Europe 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 KfW Entwicklungsbank, a German development bank, with support from the German Federal Ministry for Economic Cooperation and Development (BMZ in German) 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 June 30, 2011, EFSE has an outstanding investment portfolio of EUR 676 million (USD 982 million). LuxFLAG, an organization that certifies that microfinance investment vehicles actually invest in the microfinance sector, renewed EFSE’s label as of 2011.

By Charlotte Newman, Research Associate

Sources and Additional Resources:

European Fund for Southeast Europe: “EFSE and Byblos Bank Armenia Sign Loan Agreement to Support Micro and Small Enterprises in Armenia,” http://www.efse.lu/Press-releases—Details—2012-01-27-EFSE-and-Byblos-Bank-Armenia-sign-loan-agreement-to-support-micro-and-small-enterprises-in-Armenia——_nav.52_siteid.134_entryid.399_dir._likecms.html

MicroCapital.org story, January 10, 2012, “MICROCAPITAL BRIEF: European Fund for Southeast Europe Lends $24m to AccessBank of Azerbaijan, Kreditimi Rural I Kosoves of Kosovo, Byblos Bank Armenia, Alter Modus of Montenegro,” https://www.microcapital.org/microcapital-brief-european-fund-for-southeast-europe-lends-24m-to-accessbank-of-azerbaijan-kreditimi-rural-i-kosoves-of-kosovo-byblos-bank-armenia-alter-modus-of-montenegro/

MicroCapital Universe Profile: European Fund for Southeast Europe
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=European+Fund+for+Southeast+Europe+%28EFSE%29

MicroCapital Universe Profile: Byblos Bank Armenia
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Byblos+Bank+Armenia

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