MICROCAPITAL BRIEF: European Fund for Southeast Europe to Loan $6m to Inecobank to Support Micro- and Small Enterprises (MSEs)

The European Fund for Southeast Europe (EFSE), a Luxembourg-based, EU-backed microfinance investment vehicle (MIV), recently agreed to loan EUR 5 million (USD 6.65 million) to Inecobank, an Armenia-based microfinance bank. The loan is intended to strengthen Inecobank’s funding to micro- and small enterprises (MSEs) in Armenia to support their development and competitiveness. EFSE has been working with Inecobank since early 2012 in an effort to help support the private sector in Armenia.

As of March 2012, EFSE has an investment portfolio of EUR 723 million (USD 885 million). In the same year, Inecobank reported to US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 272 million, a gross loan portfolio of USD 199 million, 89,500 active borrowers, USD 82 million in deposits, 38,900 depositors, return on assets of 3.37 percent and return on equity of 19.54 percent.

By Adrija Vaiciulionis, Research Associate

About Inecobank:
Inecobank, a microfinance bank based in Armenia that was registered in 1996, provides loan and savings products with the aim of fostering the growth of micro-, small and medium-sized enterprises. The World Bank Group’s International Finance Corporation (IFC) holds a 10-percent stake in Inecobank. As of 2012, Inecobank reported to US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 272 million, a gross loan portfolio of USD 199 million, 89,500 active borrowers, USD 82 million in deposits, 38,900 depositors, return on assets of 3.37 percent and return on equity of 19.54 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 the financial support of the Bundesministerium für wirtschaftliche Zusammenarbeit und Entwicklung (BMZ) and the European Commission of the EU. The European Fund for Southeast Europe 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 March 2012, EFSE has an investment portfolio of EUR 723 million (USD 885 million). As of 2012, EFSE holds a label from Luxembourg Fund Labeling Agency (LuxFLAG), an organization that certifies that  microfinance investment vehicles actually invest in the microfinance sector.

About Kreditanstalt für Wiederaufbau Entwicklungsbank (KfW):
Kreditanstalt für Wiederaufbau Entwicklungsbank (KfW) is a state-owned development bank in Germany. KfW has three goals: to reduce poverty, to make globalization “fair” and to conserve natural resources. KfW collaborates with local financial institutions in approximately 60 countries, including microbanks, commercial banks, village savings banks, non-governmental organizations and regional microfinance funds. As of 2012, KfW Entwicklungsbank has a portfolio of EUR 2.15 billion (USD 2.57 billion) and total assets of EUR 518 billion (USD 681 billion).

Sources and Additional Resources:

European Fund for Southeast Europe Press Release, “EFSE Greenlights EUR 5 Million Loan to Inecobank to Support MSE Credit Business in Armenia,”
http://www.efse.lu/Details—2013-09-12-EFSE-greenlights-EUR-5-million-loan-to-Inecobank-to-support-MSE-credit-business-in-Armenia——_nav._siteid.134_entryid.499_dir._likecms.html

MicroCapital Article, July 13, 2013, “MICROCAPITAL BRIEF: EFSE Loans $33m to UniCredit for Business, Homeloans in Serbia,”
https://www.microcapital.org/microcapital-brief-european-fund-for-southeastern-europe-efse-loans-33m-to-serbias-unicredit-bank-for-microlending-and-home-improvement/

MicroCapital Article, June 17, 2013, “MICROCAPITAL BRIEF: European Fund for Southeast Europe (EFSE), European Bank for Reconstruction and Development (EBRD) Loan $4m to Mikrokreditna Fondacija Mi-Bospo of Bosnia and Herzegovina,”
https://www.microcapital.org/microcapital-brief-european-fund-for-southeast-europe-efse-european-bank-for-reconstruction-and-development-ebrd-loan-4m-to-mikrokreditna-fondacija-mi-bospo-of-bosnia-and-herzegovina/

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: KfW Entwicklungsbank (KfW)
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=KfW+Entwicklungsbank+%28KfW%29

MicroCapital Universe Profile: Inecobank
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Inecobank

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