MICROCAPITAL BRIEF: European Fund for Southeast Europe Loans $23m to Burgan Bank of Turkey for Rural MSMEs

The European Fund for Southeast Europe (EFSE), a Luxembourg-based investor in the development of local financial sectors in Southeast Europe and parts of Central Asia, recently informed MicroCapital that it has loaned EUR 20 million (USD 23 million) to Burgan Bank Turkey, a retail bank that is part of Kuwait’s Burgan Bank Group. The funds are to be on-lent on a “long-term” basis to micro-, small and medium-sized enterprises in rural areas of the country.

As of 2014, EFSE reported total assets of EUR 854 million (USD 967 million), a sub-loan portfolio of EUR 764 million (USD 865 million) and annual profits of EUR 1.8 million (USD 2 million). As of September 2014, EFSE holds a microfinance label from Luxembourg Fund Labeling Agency (LuxFLAG), an NGO that certifies that social investment vehicles actually invest as advertised.

The Burgan Bank Group reports total assets of KWD 7.8 billion (USD 26 billion).

By Jacob Ferguson, Research Associate

About European Fund for Southeast Europe (EFSE)

The Luxembourg-based European Fund for Southeast Europe (EFSE) focuses on the development of local financial sectors in Southeast Europe and parts of Central Asia. EFSE provides “long-term” funding for small and microenterprises as well as private households via its partner institutions. EFSE also supports its investments though the EFSE Development Facility, which provides technical assistance, consulting and training services supporting capacity building within its partner institutions. EFSE was established in 2005 by Kreditanstalt für Wiederaufbau (Reconstruction Credit Institute) with financial support from the German Federal Ministry for Economic Cooperation and Development (which is also known by its German acronym BMZ) and the EU’s European Commission. The fund 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. EFSE operates in 16 countries: Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, the former Yugoslav Republic of Macedonia, Kosovo, Georgia, Moldova, Montenegro, Romania, Serbia, Ukraine and Turkey. As of 2014, EFSE reported total assets of EUR 854 million (USD 967 million), a sub-loan portfolio of EUR 764 million (USD 865 million) and profit of EUR 1.8 million (USD 2 million). As of September 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] EFSE: EFSE partners with Burgan Bank to support MSMEs in turkey

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

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