EFSE Annual Meeting 2009 Structure and Performance of EFSE Arial EFSE 24and the Financial Crisis Responsible Finance NOVI SAD, SERBIA 27 MAY 2009 A Unique Blend of Commercial and Social Values
EFSE - A development finance initiative supported by: Responsible Finance A Unique Blend of Commercial and Social Values
Overview 1. EFSE - Background 2. Overall fund performance 3. Development performance 4. EFSE Development Facility 5. EFSE - Outlook
1. EFSE - Background Mission statement The Fund aims to foster economic development and prosperity in the Southeast Europe region through the sustainable provision of additional development finance, notably to micro and small enterprises ("MSEs") and to private households, via qualified financial institutions. Income generation Job creation Providing housing finance Strengthening local financial markets
1. EFSE - Background Services offered to partner lending institutions Financial instruments: Medium to long-term loans Subordinated loans Term deposits Subscriptions to bond issues Co-investments (syndicated loans) Stand-by letters of credit Guarantees Equity and quasi-equity participations Complementary non-financial services through the EFSE Development Facility: Technical assistance Training Research projects and studies EFSE Annual Development Impact Study
1. EFSE - Background Investors and shareholders Public Investors International Finance Institutions Private and Institutional Investors
1. EFSE - Background Leverage of funds Private Investors A-Shares and Notes Fund Volume in EUR million 12/05 12/08 Target 2011 20 371 430 International Finance Institutions Donor funds B Shares C Shares 60 90 100 66 179 269 EFSE pursues a Tiered Funding Strategy Σ 148 640 799
1. EFSE - Background EFSE: Flagship initiative in Development Finance Contribution to regional integration and cooperation Efficient use of public funds: Scarce public funds are used in a revolving manner and are used as a risk-cushion to leverage private capital for development finance Incorporation of local stakeholders through the Advisory Group (representatives of local central banks) Implicit coordination platform for private and public investors Transparent decision-making processes and professional management Responsible Banking : EFSE invests responsibly and promotes social values and high standards of business ethics (e.g. environmental standards, client services)
2. Overall fund performance EFSE Highlights of the year 2008 EUR 195 million investments (disbursed) more than in any other year (17% increase from 2007) EUR 500 million milestone surpassed in September 2 years earlier than target Despite unfavourable financial environment, no need for asset impairment provisions First Southeast European government, Albania, committed investment First public fund, BN&P Good Growth Fund, undertakes investment As the first investor OeEB undertakes vertical investment in all risk classes Establishment of local teams in Macedonia and Ukraine
2. Overall fund performance Investment portfolio development EUR million 600 500 400 300 200 180 214 246 272 310 345 378 414 455 510 529 100 66 66 98 0 launch Dec 05 Mar 06 Jun 06 Sep 06 Dec 06 Mar 07 Jun 07 Sep 07 Dec 07 Mar 08 Jun 08 Sep 08 Dec 08
2. Overall fund performance Investment portfolio by market (as of Dec 2008) EUR million Bosnia & Herzegovina 163.2 Serbia Romania Montenegro 65.7 74.0 79.5 Moldova Kosovo 42.8 41.1 Macedonia Supra-Regional Bulgaria Albania 31.2 13.0 10.0 8.3 Total Investment Portfolio: EUR 528.8 million
Investment portfolio per capita (as of Dec 2008) EUR 120 100 96.0 80 60 40 35.8 20 0 21.6 15.2 10.6 9.9 3.3 2.3 1.3 Bulgaria 2. Overall fund performance Montenegro Bosnia & Herzegovina Kosovo Macedonia Serbia Moldova Romania Albania
3. Development performance Outreach to end-borrowers (as of Dec 2008) Number of active end borrowers 98,087 Sub-loan portfolio EUR 442 million Average sub-loan size outstanding EUR 4,506 Number of sub-loans disbursed since inception 148,037 Amount of sub-loans disbursed since inception EUR 767 million Average sub-loan size disbursed since inception EUR 5,182 92% of MSE loans below EUR 10,000
3. Development performance Sub-loan portfolio by product (as of Dec 2008) Based on loan amount 28% 72% 61% 11% MSE Rural MSE Housing
3. Development performance Sub-loans to MSEs/rural MSEs by economic sector (as of Dec 2008) Based on loan amount Sub-loan disbursements during 2008 Industry / Production 19% Trade 31% Agriculture 23% Services 27%
3. Development performance Maturity of housing sub-loans (Dec 2008) Based on loan amount Sub-loan disbursements during 2008 More than five years 69% Four to five years 12% Up to three years 19%
4. EFSE Development Facility Enriching partnerships through non-financial assistance Mission: Strengthen internal capacity of EFSE s partner lending institutions to increase the outreach to the final target group. What does the EFSE Development Facility stand for? High-quality technical assistance focusing on key areas or processes in the partner institutions Quickly respond to the needs of EFSE s partner lending institutions Joint project design and consultant selection
4. EFSE Development Facility At a glance (2006-2008) Total project volume EUR 3.54 million Number of projects approved 87 Number of partner institutions supported 29 microcredit organisations and microfinance banks, 12 commercial banks Beneficiaries approx. 500 staff, 40% female Average project size EUR 40,600 Partner institutions cost share in total costs 30%.
5. EFSE - Outlook Perspectives Crisis-response: increased technical assistance Roll-out in Albania and start in Ukraine Focus on Rural Finance: Specific impact and country studies and development of strategy Particular support to the consolidation of the microfinance sector Investment portfolio 2011: EUR 760 million Number of MSE and housing sub-loans disbursed by 2011: 390,000 Contributed to the creation of more than 400,000* jobs by 2011 * Estimatcion according to the EFSE Annual Development Impact Study
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