Microfinance Investment Fund EFSE Acquires Additional Private Investor
Frankfurt, Germany, January, 04 2010 -
The Austrian microfinance fund of funds ESPA VINIS MICROFINANCE launching today, will invest in fixed-duration bonds (“notes”) from the Luxemburg-registered microfinance investment fund, European Fund for Southeast Europe (EFSE). The umbrella fund will place roughly 10 percent of its volume with EFSE. Investments in individual microfinance instruments are limited to this percentage by the Austrian investment fund laws.
ESPA VINIS MICROFINANCE is currently the first licensed fund of funds for social microfinance investments in Austria. Its sustainable investment approach is shaped by values that adhere to ethical criteria. Regional focal points include East and Southeast Europe, Central and South America as well as Central and East Asia. It is placed by the Austrian capital investment company ERSTE-SPARINVEST and is primarily offered to institutional investors.
EFSE offers Southeast European financial service providers with long-term refinancing instruments for the issuance of credits to micro and small enterprises (MSEs) as well as to low-income private households. Since its inception in December 2005, the Fund has facilitated approximately 200,000 loans to MSEs and private households, totalling over EUR one billion. These loans are crucial on an economic scale, as they support the creation and expansion of start-up companies. This, in turn, leads to the creation of income and employment.
As a Public-Private Partnership initiative, EFSE was initiated by KfW Entwicklungsbank (the German Development Bank). By accumulating public funds as risk capital, the EFSE can mobilize moneys from ethically motivated private institutional investors and thereby assist development projects toward a broader financial basis. In addition to the existing involvement of public institutions such as the Austrian government and the Development Bank of Austria, OeEB, the Austrian private sector, in the form of ESPA VINIS MICROFINANCE is now also joining in.
To-date, EFSE has acquired committed funds of over EUR 715 million. The senior tranche, which is primarily reserved for private institutional shareholders, as well as the notes, amount to EUR 383.3 million (equaling a share of 53 percent of total committed funds). EFSE aims to further diversify the investor structure and to increasingly have the required financial resources covered by private institutional investors. Until 2011, the EFSE plans a stock-up of the fund volume to EUR 1 billion, whereby it is aimed that approximately 60 percent of the financing will come from the private-investors-focused senior tranche.
About the European Fund for Southeast Europe (EFSE)
With an investment portfolio of EUR 559 million (as of 30 September, 2009), the EFSE is the world’s largest microfinance investment fund. Aimed at fostering economic development and prosperity in the region of Southeast Europe, the Fund offers long-term funding instruments to qualified local financial institutions for on-lending to micro and small enterprises (MSEs) and low-income private households. EFSE also runs a Development Facility whereby grants enable technical consulting and training measures to institutionally strengthen the partner finance institutions. Initiated by KfW, the EFSE is a investment company that falls under the jurisdiction of the Grand Duchy of Luxembourg in the form of a public limited company, qualifying as a société d'investissement à capital variable ("SICAV-SIF"). As the first Public-Private Partnership of its kind, combining public funding and private investment, the Fund has a strong investor base of donors, international finance institutions and private institutional investors, including: European Commission, Federal German Ministry for Economic Development and Cooperation (BMZ), the governments of Austria, Switzerland, Denmark and Albania, KfW, International Finance Corporation, FMO Netherlands Development Bank, European Bank for Reconstruction and Development, European Investment Bank, OeEB Oesterreichische Entwicklungsbank (Development Bank of Austria), Sal. Oppenheim, Deutsche Bank, BN&P Good Growth Fund, ESPA VINIS MICROFINANCE, Finance in Motion and other private investors.