43335 - EFSE MSME

Who We Are
Who We Are

IFC is the largest global development institution focused on the private sector in developing countries. By encouraging growth, IFC advances economic development, creates jobs and improves the lives of people.
More About Us
About IFC

Our Leadership

Development Partners
Accountability

Learn more about accountability
Annual Report

Download the Report
What We Do
What We Do

IFC advances economic development and improves the lives of people by encouraging the growth of the private sector in developing countries. We achieve this by investing in impactful projects, mobilizing other investors, and sharing expertise.
What We Do Overview
SOLUTIONS

Our products and services
OUR PRIORITIES

Climate Business

Fragile & Conflict Afflicted Situations

Gender

Mobilizing Private Capital

Sustainability
SECTORS & EXPERTISE

Agribusiness & Forestry

Creative Industries

Education

Financial Institutions

Funds

Health

Infrastructure

Manufacturing

Public-Private Partnerships

Tourism, Retail & Property

Trade & Supply Chain Finance

Venture Capital

Working Upstream
Where We Work
Where We Work

As the largest global development institution focused on the private sector, IFC operates in more than 100 countries around the globe. We apply lessons learned in one region to solve problems in another.
Overview
By Region

Africa

East Asia and Pacific

Europe

Latin America and the Caribbean

Middle East and Central Asia

South Asia
Our Impact
Our Impact

Our impact improves lives. IFC brings a clear set of advantages to the world’s most challenging markets. Including a history of innovation, a global mandate, and a determination to achieve measurable development impact.
Our Impact Overview
PRINCIPLES & MEASUREMENT

Impact Investing at IFC

Measuring and Monitoring (AIMM)

Evaluation

Sustainable Development Goals (SDGs)

Owned by 186 member countries and consistently rated AAA/Aaa. IFC aims to achieve our mission of promoting development by providing debt and equity to the private sector, through a range of benchmark and bespoke products.

For Partners

For Investors

Get in Touch

Summary of Investment Information

Project Number

43335

Company Name

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

Date SPI Disclosed

Feb 21, 2020

Country

Southern Europe Subregion

Region

Europe

Projected Board Date

Mar 30, 2020

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Apr 10, 2020

Department

Regional Industry - FIG - ECA

Industry

Financial Markets

Previous Events

Approved : Mar 25, 2020
Signed : Mar 31, 2020
Invested : Apr 3, 2020

Sector

Microfinance and Small Business - Non Commercial Banking

Project Description

The proposed project is an investment of US$40.3 million in the European Fund for Southeast Europe (“EFSE” or “the Fund”). EFSE is a collective debt investment vehicle that channels long term resources for on-lending to micro and small businesses and private households through banks and microfinance institutions in Europe and Central Asia (“ECA”).

The Fund has expanded beyond its initial target countries currently serving 66 partner institutions in 14 countries and disbursed a cumulative EUR7.6 billion to over 1 million enterprises and households as of December-end 2019.

The project will help bridge the micro, small and medium enterprises (“MSME”) gap in ECA and shore up access to finance for MSMEs and low-income housing loans.

Associated Advisory Engagement

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	40.33
Equity

Development Impact

Stakeholders' effect (Access to MSME finance): The most significant, expected Stakeholders' effect is increased access to MSME finance through long-term lending to banks and microfinance institutions. Since inception, the Fund has generated, via on lending by the financial intermediaries funded, more than 1 million sub-loans totaling EUR7.6 billion. This has directly contributed to the lessening of the MSME finance gap in the region, which remains underserved by local banks or any other alternative sources of capital. Market creation (Integration): IFC anticipates that the Project will enhance connectivity and integration among public and private investors by demonstrating to the wider investor community that the MSME segment poses bankable investment opportunities representing an attractive risk-reward profile. Market creation (Inclusiveness): IFC anticipates that the Project can foster greater inclusiveness in the market through expanding microfinance and banking services, through efficient underwriting, use of fintech, responsible finance practices, and innovation to reach underserved segments.

Long-term funding: The proposed IFC investment in the Fund will contribute additional long-term capital of up to eight years to leverage up local financial institutions in ECA enabling longer-term funding for MSME projects. Risk mitigation: IFC has substantial non-financial additionality in terms of providing comfort to the prospective private investors who may be less comfortable with emerging markets investments given the current difficult fundraising environment in ECA. IFC's continued commitment to EFSE will provide comfort to the current and prospective investors and will send a positive signal in crowding in additional private sector investors.

E&S Category Rationale / Risks and Mitigation

Pipeline to be supported through this project by EFSE, an existing IFC client, is expected to have potential limited adverse environmental and/or social risks or impacts that are few in number, generally site specific, largely reversible, and can be readily addressed through mitigation measures. Hence this project has been categorized as FI-2 in accordance with IFC Sustainability Policy. IFC’s applicable E&S requirements for this project will be to comply with IFC Exclusion List, and host country E&S laws and regulations. Going forward, the fund will not support any coal related activities and projects exposed to higher risk activities including: a) involuntary resettlement, b) risk of adverse impacts on indigenous peoples, c) significant risks to or impacts on the environment, community health and safety, biodiversity, cultural heritage or d) significant occupational health and safety risks. In addition, EFSE’s advisor will be required to continue applying their human resources practices in conformity with IFC's PS2 on Labor and Working conditions.

The main E&S risks and impacts of this project relate to the ability of the Fund to identify and manage E&S risks in line with IFC’s applicable requirements. The fund has a documented E&S management system (“ESMS”) in place, which is being updated and improved to be fully in line with the requirements of this specific project. The Fund has retained proper capacity in place for effective implementation of the ESMS.

Contacts

For Inquiries About the Project, Contact

Finance in Motion GmbH
Jasminka Bergert
Manager
+49 69 271 035-140
j.begert@finance-in-motion.com
Carl-von-Noorden-Platz 5, 60596 Frankfurt am Main, Germany
www.finance-in-motion.com

For Inquiries and Comments About IFC, Contact

General IFC Inquiries
IFC Communications
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384

IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.

Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

IFC complaint response is separate from and complementary to IFC’s clients’ project level grievance mechanisms and IFC’s Independent Accountability Mechanism (CAO). Lodging a complaint directly with IFC does not, at any time, restrict access to CAO.

Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.

Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
Mail/Hand Delivery to: 2121 Pennsylvania Avenue, NW, Washington, DC 20433, USA
Voice mail: +1 202 458 1973
Email: cao@worldbankgroup.org
SMS, WhatsApp, Telegram, and Signal: +1 202 650 2627

CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. It also includes findings and recommendations related to environmental and social considerations regarding this potential investment. The purpose of the SII is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

Task Title & Description	Anticipated Completion Date
Provide the approved updated E&S policy to IFC	03/31/2020
Improve the existing ESMS procedures	09/27/2020
Provide training plan for fund’s advisor’s staff	03/31/2020
Implementation of the training per the plan	04/30/2020

Projects

Summary of Investment Information

Project Description

Associated Advisory Engagement

Sponsor / Cost / Location

Development Impact

E&S Category Rationale / Risks and Mitigation

Similar Projects

Contacts

Projects

Summary of Investment Information

Project Description

Associated Advisory Engagement

Sponsor / Cost / Location

Project Sponsor and Major Shareholders of Project Company

Total Project Cost and Amount and Nature of IFC's Investment

IFC's Investment as Approved by the Board

Location of Project and Description of Site

Development Impact

Anticipated Impact Measurement & Monitoring (AIMM) Assessment

IFC's Role and Additionality

E&S Category Rationale / Risks and Mitigation

Environmental & Social Categorization Rationale / Key Risks & Potential Impacts

Environmental & Social Management System (ESMS)

Mitigation Measures / Environmental & Social Action Plan (ESAP)

Press-Release

Related Environmental Document

Similar Projects

Contacts

Information on E&S Complaints and Grievance Mechanisms

Disclaimer