37052 - EFSE IV

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Summary of Investment Information

Project Number

37052

Company Name

The European Fund For Southeast Europe S.A., SA

Date SPI Disclosed

Jul 31, 2015

Country

Southern Europe Subregion

Region

Europe

Projected Board Date

Sep 9, 2015

Environmental Category

FI-2 - Limited

Status

Completed

Last Updated Date

May 8, 2026

Department

Regional Industry - FIG - ECA

Industry

Financial Markets

Previous Events

Approved : Sep 15, 2015
Signed : Nov 27, 2015
Invested : Dec 14, 2015

Sector

Microfinance and Small Business - Non Commercial Banking

Project Description

The European Fund for Southeast Europe ("EFSE", or the "Fund"), promoted by KfW, is a collective debt investment vehicle that channels long term resources for housing finance and on-lending to micro-and-small businesses through banks, specialized microfinance institutions and viable microfinance non-profit organizations. IFC was one of the cornerstone investors at the Fund’s first closing and has supported the Fund via several rights issues throughout the years.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	56.05
Equity

Development Impact

The key development objective of this proposed project is to increase financial inclusion in the Fund''s target countries, with increased focus on providing access to finance for micro and small borrowers. Such micro and small financing would be tracked by the outreach of the envisaged target Partner Lending Institution ("PLI") groups, by sectors, by number of sub-loans and by their average size. The proposed project is also expected to create a demonstration effect for other investors to promote their finance to MSE''s across the target countries. Despite the severity of the financial crisis, EFSE has remained an active lender in the MSE segment and has continued to support a large number of institutions in its mandated region.

The proposed project is expected to deliver the following benefits:

- Long-term Partnerships: Through this facility, IFC will be enhancing its long-term partnership with KfW, to promote sustainable growth of MSME''s in the region.
- Resource Mobilization: IFC''s investment in EFSE will play an important role to stimulate other international finance institutions ("IFIs") and private investors, which is a significant support for the Fund''s funding.

Indicator	Metrics	Calendar Year 2022	Calendar Year 2023	Calendar Year 2024
CORE - E and S Management Systems (Y/N)	Compliance/Enhancement	Not Available	Not Available	Not Available
Access to Finance: Outstanding SME Portfolio (#)	Outstanding Portfolio (#)	Not Available	Not Available	Not Available
Access to Finance: Outstanding SME Portfolio ($)	Outstanding Portfolio ($)	Not Available	Not Available	Not Available
Access to Finance: Outstanding Microfinance Portfolio (#)	Outstanding Portfolio (#)	Not Available	Not Available	Not Available
Access to Finance: Outstanding Microfinance Portfolio ($)	Outstanding Portfolio ($)	Not Available	Not Available	Not Available

E&S Category Rationale / Risks and Mitigation

The proposed project targets IFC's exercise of its subscription rights in EFSE for (i) “A” senior shares up to a total subscription price of EUR30 million and (ii) “B” mezzanine shares up to a total subscription price of EUR20 million. The European Fund for Southeast Europe (EFSE) promoted by KfW, is a collective debt investment vehicle that channels long term resources for on-lending to micro-and-small businesses and housing finance through banks, specialized microfinance institutions and viable microfinance non-profit organizations (collectively partner lending institutions 'PLIs') in the Southeast European region.The fund's operations through financial institutions including commercial banks, micro finance institutions and non bank financial institutions. The sub-loans target micro and small enterprises and housing loans, which entail business activities that have potential limited adverse environmental or social risks or impacts that are few in number, generally site-specific, largely reversible, and readily addressed through mitigation measures. The project has therefore been classified as FI-2 according to IFC Environmental and Social Review Procedure. For this particular project, IFC's applicable requirements will be to ensure that the fund ensures compliance with IFC Exclusion List, the applicable environmental and social national laws and regulations and IFC Performance Standards where necessary, in its operations including IFC's PS2 on Labor and Working conditions.

The main E&S risks and impacts of this investment relate to EFSE having adequate systems and capacity in place to manage its lending operations in accordance with applicable requirements, including compliance with the IFC's Exclusion List, Host Country Laws and Regulations and IFC Performance Standards where necessary. EFSE has an Environmental and Social Management System (“ESMS”) in place and has designated staff members with overall responsibility for implementation of the ESMS. The due diligence records provided by the client were of good quality and concluded a satisfactory review was conducted.

Contacts

For Inquiries About the Project, Contact

European Fund for Southeast Europe

Monika Beck – Chair of the EFSE Board of Directors
KfW Bankengruppe
Senckenberganlage 30 – 36
60487 Frankfurt am Main
Germany

Phone: +49 (0) 69 74314069
E-mail: mailto:monika.beck@kfw.de

Finance in Motion GmbH

Sylvia WisniwskiTheodor-Stern-Kai 160596 Frankfurt am MainGermany Phone: +49 (0) 69 97 78 76 50 - 0Fax: +49 (0) 69 97 78 76 50 - 10E-mail: mailto:s.wisniwski@finance-in-motion.com

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