MICROCAPITAL BRIEF: EFSE Lending $2.4m to BT Leasing MD to Support MSEs in Moldova During Coronavirus Pandemic

The European Fund for Southeast Europe (EFSE), a microfinance investment vehicle domiciled in Luxembourg, recently agreed to loan EUR 2 million (USD 2.4 million) to Banca Transilvania (BT) Leasing MD, a Moldovan entity controlled by Romania’s BT, to finance micro- and small enterprises (MSEs) that need capital as a result of the economic impacts of COVID-19. BT Leasing MD has 3,000 clients, mainly small and medium-sized enterprises.

EFSE Board Chairperson Christoph Tiskens said, “Leasing is an important source of financing for many small business owners. It opens up access to long-term investment in fixed assets without demanding the large amounts of collateral often unavailable to MSEs. We are glad to be continuing our successful partnership with BT Leasing in creating tailored financing opportunities for the hardworking entrepreneurs of Moldova.”

BT is a privately-owned bank that was established in Romania in 1994 and serves approximately 3.2 million clients as of 2020. It has four divisions: (1) retail; (2) small and medium-sized enterprise; (3) corporate; and (4) medical, which lends to households for hospital expenses. During the six months ending June 2020, BT reported net consolidated profit of RON 690 billion (USD 168.7 billion) on total assets of RON 98.4 billion (USD 24 billion).

EFSE provides “long-term” funding for MSEs as well as households via partner retail institutions. EFSE also operates the EFSE Development Facility, which provides technical assistance, consulting and training services to support capacity building within these institutions. EFSE was established in 2005 by German development bank Kreditanstalt für Wiederaufbau (KfW), 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, Georgia, Kosovo, Moldova, Montenegro, North Macedonia, Romania, Serbia, Turkey and Ukraine. As of 2019, the fund reports outstanding investments of EUR 957 million (USD 1 billion) in its 63 partner lenders, including 35 microfinance institutions. As of December 2019, EFSE holds a microfinance label from Luxembourg Fund Labeling Agency (LuxFLAG), an NGO that certifies that social investment vehicles actually invest as advertised.

By Nathan Kiplagat, Research Associate

Sources and Additional Resources

EFSE news release
https://www.efse.lu/news-events/news/detail/efse-loans-additional-eur-2-million-to-bt-leasing-to-expand-access-to-financing-for-moldovan-entrepr/

BT financial results
https://www.bancatransilvania.ro/bt-social-media-newsroom/en/news/bts-financial-results-as-at-june-30-2020/

BT Leasing MD homepage
https://btleasing.md/

EFSE homepage
https://www.efse.lu/

EFSE financial report
https://www.efse.lu/studies-publications/publications/detail/development-performance-q3-2019/

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