MICROCAPITAL BRIEF: EFSE Funding $2.3m in Microenterprise Loans in Bosnia and Herzegovina via Mi-Bospo, Half in Rural Areas

The European Fund for Southeast Europe (EFSE), a Luxembourg-based microfinance investment vehicle, recently announced it will loan EUR 2 million (USD 2.3 million) to Microcredit Foundation Mi-Bospo, a non profit microfinance institution in Bosnia and Herzegovina. The investment is intended to enable lending to approximately 3,000 micro- and small enterprises (MSEs) that have experienced “difficulty securing financing through more traditional channels.” Half the value of the loan is “earmarked for rural regions.”

EFSE Board Chair Christoph Tiskens stated that the loan will “further advance the EFSE goal of expanding access to responsible finance and signifies the success of our ongoing partnership” with Mi-Bospo. The partnership between EFSE and Mi-Bospo dates back ten years and has resulted in “nearly 16,000 sub-loans to rural businesses and MSEs” during that time.

Mi-Bospo, which is based in Tuzla, provides business, housing and other types of loans, predominantly to women. The nonprofit Bosnian Council for Aid, which also is known as Bospo founded Mi-Bospo in December 2000. As of 2017, Mi-Bospo has a network of 29 offices, which are concentrated in the northeast of the country. According to the US-based nonprofit Microfinance Information Exchange (MIX), Mi-Bospo had assets totaling USD 28.6 million, a gross loan portfolio of USD 26.1 million and 21,000 borrowers as of 2016. The institution does not accept deposits.

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 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 lends 2 mln euro to Bosnia’s MI-BOSPO to fund micro enterprises



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