MICROCAPITAL STORY: European Fund for Southeast Europe (EFSE) provides EUR 5m Microfinance Loan to ProCredit Bank Albania

ProCredit Bank Albania has received a EUR 5 million loan from the European Fund for Southeast Europe (EFSE), a Luxembourg based microfinance fund. The loan is split into two components with EUR 2 million for Energy Efficiency Housing Loans and EUR 3 million for Rural Loans. ProCredit Bank will be the first bank in Albania to offer these specialized energy loans which are aimed at helping families and businesses reduce their energy costs by financing energy-saving technologies. The bank also hopes to extend its outreach to small and medium enterprises (SMEs) in rural areas as the Rural Loans will be targeted towards small-scale agricultural clients.  

According to the MIX Market, the microfinance information clearinghouse, six microfinance organizations operate in Albania, including ProCredit Bank.  The consolidated Gross Loan Portfolio of these six organizations is USD 298.2 million, based on latest available financial information.

ProCredit Bank Albania is part of the wider network of ProCredit banks which exist in 22 countries in Southeast Europe, Africa and Latin America. It was founded in 1995 as the ‘Foundation for Enterprise Finance and Development’ (FEFAD) with 100 percent of its share capital provided by KfW. The current shareholders are ProCredit Holding, the parent company of the ProCredit group, which owns 80 percent, with the German Commerzbank holding the balance of shares. A recent MicroCapital Paper Wrap-Up listed ProCredit Holding as one of the top 10 microfinance investment vehicles with Assets Under Management of USD 1.019 billion in 2008.

For the year ended 31 December 2007 ProCredit had 32,581 active borrowers and 198,668 savers. Its Total Assets were USD 354.7 million with a Gross Loan Portfolio of USD 161.5 million. Return on Assets and Return on Equity were 1.6 percent and 20.53 percent respectively. Information on ProCredit Albania’s websites details that it received a B+ rating with a ‘stable’ outlook from global rating agency Fitch Ratings, in April 2009.

EFSE was established in 2005 by the German Development Bank KfW Entwicklungsbank. Since then EFSE has committed over EUR 600 million to 55 commercial banks, microfinance institutions and non-bank financial institutions in Southeast Europe. This has facilitated EUR 835 million towards 166,000 loans to micro, small and medium enterprises (MSMEs) and low-income private households as of 31 March 2009. According to the 2007 EFSE Annual Development Impact Study 2007 this has contributed to the creation of 245,000 jobs. As at the end of March 2009 EFSE had USD 706.3 million in Fund assets of which USD 393.2 million were allocated towards microfinance investments. This recent MicroCapital story details a recent investment by EFSE in Serbia for EUR 20 million to expand MSME activities.

By Sally Levy, Research Assistant

Additional Resources:

ProCredit Bank Albania: ProCredit Bank for the first time in Albania offers loan for reducing of energy use

European Fund for Southeast Europe (EFSE): EFSE provides EUR 5 million to ProCredit Bank Albania

MIX Market: ProCredit Bank Albania

MicroCapital Story: European Fund for Southeast Europe (EFSE) Provides EUR 20m Loan to Serbia’s Komercijalna Banka

MicroCapital Paper Wrap-Up: Microfinance Funds Continue to Grow Despite the Crisis, by the Consultative Group to Assist the Poor (CGAP)

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