The European Fund for Southeast Europe (EFSE)

Investing in financial inclusion in Southeast Europe, Eastern Europe and the Caucasus

Impact contribution
>2.2 million indirect jobs supported in MSMEs receiving finance through partner institutions

Impact strategy
Social impact

Investment strategy
Private debt

Assets under management
EUR 1,305.9 mn


Impact Report

Initiated in

Initiated by
KfW Development Bank with risk capital from the German Federal Ministry for Economic Cooperation and Development (BMZ) and the European Commission

Target regions
Southeast Europe, Eastern Europe, and the Caucasus

SFDR classification
Article 9 fund

The European Fund for Southeast Europe (EFSE) fills the financing gap and provides non-financial support to micro, small and medium enterprises (MSMEs) and private households in Southeast Europe and selected countries in Eastern Europe and the Caucasus. 

EFSE was initiated in 2005 by KfW Development Bank. Some experts who participated in launching the fund, later established Finance in Motion. EFSE was developed with the support of donors and international financial institutions, such as the European Commission and the German Federal Ministry for Economic Cooperation and Development (BMZ). It has since grown into one of the largest development finance vehicles worldwide, with over EUR 1 billion assets under management. Finance in Motion serves as the fund’s advisor.  


Fills the funding gap for micro, small and medium enterprises

Fostering economic development and prosperity since 2005

Finance in Motion is the advisor to EFSE, which helps create conditions for MSMEs to thrive by building up and investing in local financial infrastructure. The fund creates impact by channeling financing via local financial institutions to MSMEs and facilitating knowledge-sharing through its Development Facility. EFSE’s Entrepreneurship Academy also fosters entrepreneurship and innovation through its on-the-ground training and mentorship activities. In this way, the fund aims to achieve impact on both an individual and systemic level.  

Our financing efforts work towards the following Sustainable Development Goals (SDGs): No Poverty (SDG 1), Zero Hunger (SDG 2), Decent Work and Economic Growth (SDG 8), Industry, Innovation and Infrastructure (SDG 9), Reduced Inequalities (SDG 10), and Partnerships for the Goals (SDG 17). 

Invest in economic development

Zooming in on Sustainable Finance

The report tells the story of how EFSE has deepened its commitment to sustainability and increased the support for its partners and local entrepreneurs helping them manage ESG-related risks and capitalize on opportunities for robust, competitive growth. 



EFSE’s impact

Number of subloans facilitated to MSME and households (1)


Share of total rural and MSMEs subloans disbursed below EUR 20,000


Share of microfinance institutions among active partner institutions


Share of partner institutions with EFSE investments dedicated to rural & agri financing


Share of subloans disbursed to rural end-borrowers


Capacity building projects dedicated to advancing the agricultural sector (1)


Indirect jobs supported in MSMEs receiving financing through partner institutions (1,2)


Partner institutions supported with capacity building in developing and strengthening processes and practices (1)


People trained (1)


Volume of subloans enabled for MSMEs through EFSE financing (1)

EUR 6.7 bn

Active borrowers


EFSE partner institutions (1)


MSMEs receiving EFSE financing through partner lending institutions (1,2)


Share of outstanding portfolio in local currencies


Share of MSMEs and rural sub-loans disbursed in local currencies


Women-owned enterprises reached through MSMEs finance (1,2)


Share of female participants in capacity building projects


Committed capital

EUR 1.2 bn

Share of private capital committed to EFSE


Volume of technical assistance projects (1)

EUR 46 mn


(1) Cumulative figure since inception.
(2) Figures are modeled by Finance in Motion based on primary reporting and third-party data.

About EFSE

Fostering economic development and prosperity

The EFSE combines market-based returns with the opportunity to create tangible impact in Southeast Europe and selected countries in Eastern Europe and the Caucasus.  

The fund, managed by a highly experienced investment team with regional expertise, has a strong track record of creating measurable impact by supporting job creation and expanding access to affordable housing.  

Investors in the fund can manage their risk exposure through the fund’s tranched capital structure, which offers a risk cushion for noteholders provided by subordinated share classes. 

Invest in the economic development and prosperity of Southeast Europe

Fund details  

How the fund invests

How to invest

Donors and investors

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