MICROCAPITAL BRIEF: Partner Microcredit Foundation of Bosnia and Herzegovina Borrows $4m from European Fund for Southeast Europe (EFSE) for Lending to Micro, Small Enterprises (MSEs)

Partner Microcredit Foundation (PMCF), a microfinance institution in Bosnia and Herzegovina, recently borrowed EUR 3 million (USD 4.1 million) under a senior loan agreement from the European Fund for Southeast Europe (EFSE), a Luxembourg-based investment vehicle organization promoting economic development. PMCF is to use the facility to finance 5,000 new loans to micro- and small enterprises (MSEs) with the aim of strengthening their financial positions, facilitating growth and creating employment opportunities in Bosnia and Herzegovina.

Monica Beck, Chairperson of the Board of EFSE, said that “its strong presence in the rural areas of Bosnia and Herzegovina especially makes PMCF an ideal partner for the EFSE in helping us to fulfill our mission of fostering economic development and prosperity in the region”[1]. Senad Sinanovic, Director of PMCF, explained that the cooperation between EFSE and PMCF started in 2002 and that these “business loans will enable our clients to generate income from small or family businesses and to create new jobs for their family members or new employees”[1].

According to the US-based nonprofit data provider Microfinance Information Exchange (MIX), PMCF, a nonprofit and non-deposit-taking institution founded by US-based Mercy Corps, reported USD 74.2 million in assets, a gross loan portfolio of USD 60.8 million and approximately 36,100 active borrowers as of 2012. As of the same year, PMCF earned return on equity of 4.59 percent and return on assets of 1.82 percent. Also as of 2012, EFSE reported total assets of EUR 835 million (USD 1.1 billion), a sub-loan portfolio of EUR 638 million (USD 875 million) and a profit of EUR 1.7 million (USD 2.3 million). EFSE was founded in 2005.

By Alíz Crowley, Research Associate

About Partner Microcredit Foundation (PMCF)

Partner Microcredit Foundation (PMCF) is a nonprofit and non-deposit-taking microfinance organization in Bosnia and Herzegovina that was created in 1997 by US-based nonprofit Mercy Corps. PMCF is headquartered in Tuzla and operates through 55 branches in Bosnia and Herzegovina. PMCF provides microcredit focusing on agriculture and rural development. Furthermore, PMCF is engaged in the financing of housing and home improvement and offers specialized loans for energy saving methods and solar energy collectors. According to the US-based nonprofit data provider Microfinance Information Exchange (MIX), PMCF had USD 74.2 million in assets, a gross loan portfolio of USD 60.8 million and approximately 36,100 active borrowers as of 2012. As of the same year, PMCF had return on equity of 4.59 percent and return on assets of 1.82 percent.

About the European Fund for Southeast Europe (EFSE)

Luxembourg-based European Fund for Southeast Europe (EFSE) focuses on the development of local financial sectors in Southeast Europe. EFSE provides “long-term” funding for small and microenterprises as well as private households via its partner institutions. EFSE also supports investment activities 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 Germany’s Kreditanstalt für Wiederaufbau (KfW), meaning Reconstruction Credit Institute, with the financial support of 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 2012, EFSE reported total assets of EUR 835 million (USD 1.1 billion), a sub-loan portfolio of EUR 638 million (USD 875 million) and a profit of EUR 1.7 million (USD 2.3 million). As of December 2013, 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] European Fund for Southeast Europe Website, May 2014, EFSE provides EUR 3 million senior loan to Partner MCF in Bosnia and Herzegovina 

MicroCapital, May 21, 2014, Partner Microcredit Foundation (PMCF) of Bosnia and Herzegovina Borrows $5.5m from Green for Growth Fund (GGF) for Energy Efficiency Financing

MicroCapital, April 15, 2014, European Fund for Southeast Europe (EFSE) Loans $26m to Yapi Kredi of Turkey to Support Leasing to Micro-, Small, Medium-sized Enterprises (MSMEs)

MicroCapital, March 13, 2014, Belgazprombank (BGPB) of Belarus to Receive $41m Syndicated Loan from European Bank for Reconstruction and Development (EBRD), European Fund for Southeast Europe (EFSE)

MicroCapital, February 27, 2014, European Fund for Southeast Europe (EFSE) Loans $20m to ProCredit Bank Serbia for Small, Medium-sized Enterprises

MicroCapital Universe Profile: Partner Microcredit Foundation 

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

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