MICROCAPITAL BRIEF: European Fund for Southeast Europe (EFSE) to Loan $20m to Bank Republic of Georgia to Support Lending to Micro-, Small Enterprises (MSEs)

The European Fund for Southeast Europe (EFSE), a Luxembourg-based, EU-backed microfinance investment vehicle (MIV), recently agreed to grant a senior loan facility of USD 20 million to Bank Republic, a Georgian member of the France-based financial group Société Générale [1]. The loan is intended to support the bank’s lending to micro- and small enterprises (MSEs) and is planned to fund 1,600 new loans through 28 branches of the bank.

Bank Republic reported total assets of GEL 772 million (USD 464 million), total liabilities of GEL 654 million (USD 392 million), return on assets (ROA) of 2.42 percent and return on equity (ROE) of 16 percent as of September 2012. Société Générale reported total assets equivalent to USD 1.69 trillion and net banking income equivalent to USD 31 billion as of December 2012. As of June 2013, EFSE has an investment portfolio of EUR 774 million (USD 1 billion).

By Nisha Koul, Research Associate

About Bank Republic: Established in 1991 in Georgia, Bank Republic is a member of the French financial services group, Société Générale. The bank provides services to the retail and corporate markets through 39 branches throughout the country. As of September 2012, Bank Republic reported total assets of GEL 772 million (USD 464 million), total liabilities of GEL 654 million (USD 392 million), return on assets (ROA) of 2.42 percent and return on equity (ROE) of 16 percent.

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 2013, EFSE holds a microfinance label from Luxembourg Fund Labeling Agency (LuxFLAG), an NGO that certifies that social investment vehicles actually invest as advertised.

About Société Générale: Société Générale is a financial institution that was established in 1864 and is based in Paris. Société Générale offers retail and private banking, corporate and investment banking, and investment management services in 85 countries. As of December 2012, Société Générale reported total assets equivalent to USD 1.69 trillion and net banking income equivalent to USD 31 billion.

Sources and Additional Resources:

[1] EFSE Press Release: EFSE signs USD 20 million senior loan with Bank Republic in Georgia, October 9, 2013 http://www.efse.lu/Press-releases—Details—2013-10-09-EFSE-signs-USD-20-million-senior-loan-with-Bank-Republic-in-Georgia——_nav.52_siteid.134_entryid.504_dir._likecms.html

MicroCapital Story, September 19, 2013, “European Fund for Southeast Europe to Loan $6m to Inecobank to Support Micro- and Small Enterprises (MSEs),” https://www.microcapital.org/microcapital-brief-european-fund-for-southeast-europe-to-loan-6m-to-inecobank-to-support-micro-and-small-enterprises-mses/

MicroCapital Story, June 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,” https://www.microcapital.org/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/

MicroCapital Story, July 1, 2013, “International Finance Corporation (IFC) Loans $4m to FINCA Georgia to Support Micro- and Small Businesses, Entrepreneurs,” https://www.microcapital.org/microcapital-brief-international-finance-corporation-ifc-loans-4m-to-finca-georgia-to-support-micro-and-small-businesses-entrepreneurs/

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: Bank Republic, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Bank+Republic

MicroCapital Universe Profile: Société Générale, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Societe+Generale

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