The European Fund for Southeast Europe (EFSE), a Luxembourg-domiciled fund that promotes economic development primarily through financing micro- and small enterprises, recently extended a senior loan of EUR 15 million (USD 18 million) to Romania’s Garanti Leasing, which is controlled by Turkey’s Garanti Bank. Garanti Leasing will use the proceeds of the loan to finance micro-, small and medium-sized enterprises in Romania.
Garanti Leasing is a unit of Garanti Bank’s Garanti Group Romania. Garanti Bank has been operating since 1990 and provides both small and large enterprises with financing for investments including inventory; real estate; vehicles; and equipment for agriculture, textile production, printing and construction. Garanti Bank reports assets of USD 89 billion and 2016 net income of USD 1.5 billion.
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. The fund 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. EFSE 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, it reported a gross loan portfolio of EUR 957 million (approximately USD 1.0 billion).
By Ryan Gauthier, Research Associate
Sources and Additional Resources
European Fund for Southern Europe press release:
MICROCAPITAL BRIEF: Targeting Rural MSEs, EFSE Lends Local-currency Equivalent of $6m to Opportunity Bank Serbia:
MICROCAPITAL BRIEF: IFC Lending $5.6m to Romania’s Garanti Leasing to Finance Women-owned SMEs
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