Microfinance Monitor, June 11, 2010 –The European Fund for Southeast Europe (EFSE) signed a loan agreement of USD 10 million with Armenia’s Converse Bank for on-lending to small business in Armenia today during its annual meeting in Ohrid, FYR Macedonia. It is the first investment of EFSE in the country.
Converse Bank will use loan proceeds to expand financing of investments and working capital of small businesses in Armenia with long-term loans up to EUR 100,000. The loan will help the Bank to meet the demand for long-term financing especially from micro and small enterprises (MSEs), which dominate the private sector in the country.
Converse Bank is the 8th bank in Armenia by assets, servicing MSEs, with a special focus on the smallest borrowers in rural areas.
EFSE’s loan to Converse Bank is being provided under the European Neighbourhood Small Business Growth Facility (ENBF), a dedicated European Neighbourhood window within the EFSE structure.
EFSE began its operations in Armenia in December 2009, when it expanded to include further countries of the European Eastern Neighbourhood Region, including Armenia, Azerbaijan, Belarus and Georgia.
Over the next five years, EFSE is expected to provide financing in a total amount of EUR 300 million to financial institutions in the European Eastern Neighbourhood region, including Moldova and Ukraine. This will allow EFSE to facilitate approximately 100,000 business loans to MSEs and housing loans to low-income private households in the region.
Overall, since its inception in December 2005 until December 2009, EFSE has offered a total of EUR 684 million in financing to commercial banks, small-business banks and microfinance institutions throughout Southeast Europe. These partner lending institutions have on-lent EUR 1.1 billion of EFSE funds in the form of roughly 216,000 business and housing loans.
