The European Fund for Southeast Europe (EFSE), a Luxembourg-based microfinance investment vehicle, recently announced it will loan RSD 615 million (USD 6 million) to Opportunity Bank Serbia (OBS), a branch of US-based microfinance network Opportunity International, “to support small businesses, especially in rural areas.” EFSE claims this agreement makes it “the first international lender to provide a loan in Serbian dinars,” leveraging the three-year bond issued in 2016 by the UK-based European Bank for Reconstruction and Development (EBRD) in the amount of RSD 2.5 billion (USD 24.5 million).
OBS is a microfinance institution that was founded in 2002. It offers loans, insurance, savings and current (checking) accounts to private individuals as well as loans to small businesses. As of December 2016, OBS reports a gross loan portfolio of EUR 82 million (USD 96.6 million) outstanding to approximately 37,000 loan customers and EUR 59 million (USD 69.6 million) in deposits for approximately 38,000 savings clients.
OBS is a member of Opportunity International, a nonprofit network of financial institutions that was founded in the US city of Chicago in 1971. Opportunity International provides loans, savings, insurance and training to 12 million individuals in 28 countries in Africa, Asia, Europe and Latin America. In addition to its headquarters in Chicago, Opportunity International has administrative offices in Australia, Canada, Germany, Hong Kong, Singapore, Switzerland and the UK.
EFSE provides “long-term” funding in Southeast Europe and parts of Central Asia to financial institutions that serve micro- and small enterprises as well as private households. EFSE also operates a development facility through which it provides consulting and training services to these institutions. EFSE was established in 2005 by German development bank Kreditanstalt für Wiederaufbau (KfW) with the financial support of the EU’s European Commission and the German Federal Ministry for Economic Cooperation and Development, which is also known by its German acronym BMZ. 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, Georgia, Kosovo, Moldova, Montenegro, Romania, Serbia, Ukraine, Turkey and the Former Yugoslav Republic of Macedonia. As of 2017, EFSE holds a microfinance label from the Luxembourg Fund Labeling Agency (LuxFLAG), an NGO that certifies that social investment vehicles actually invest as advertised. As of 2016, EFSE reported a gross loan portfolio of EUR 957 million (approximately USD 1.0 billion).
By Jacob O’Driscoll, Research Associate
Sources and Additional Information
EFSE becomes first international lender to provide loan in Serbian dinar
https://www.efse.lu/studies-publications/publications/detail/efse-becomes-first-international-lender-to-provide-loan-in-serbian-dinar/
EFSE
https://www.efse.lu/
Opportunity Bank Serbia
http://obs.rs/
Opportunity International
http://opportunity.org/
EBRD
http://www.ebrd.com/
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