Luxembourg, 17 July, 2023 – The European Fund for Southeast Europe (EFSE) released its latest Impact Report titled “Empowering and Building MSME Resilience”. The report reviews 2022, a year marked by unprecedented crises which profoundly affected financial sectors and micro, small and medium enterprises (MSMEs) in EFSE’s target region - Russia’s war of aggression against Ukraine being among one of the key destabilizing factors.
EFSE’s crisis response, detailed in this report, has been swift and decisive, including mobilizing EUR 2.5 million to implement 15 projects under the “Stand with Ukraine” programme, disbursing over EUR 300 million to 74 partner lending institutions and implementing more than 40 technical assistance projects across the region, achieving growth in portfolio and outreach. Against the odds, the fund maintained the momentum of its transformative agenda, achieving significant progress across key sustainability dimensions while demonstrating EFSE’s strong partnership in the region and contributing toward the Sustainable Development Goals.
For instance, since the fund’s inception, the number of jobs indirectly supported through loans provided by EFSE partner lending institutions has grown to more than 2,000,000. This includes over 864,000 jobs held by women. EFSE’s enhanced strategic focus on diversity and inclusion is also demonstrated by providing financing to institutions with a strategic focus on female MSME clients - to date, the fund’s financing reached nearly 44,000 women-owned enterprises. Also detailed in the report are the advances made in equipping financial institutions and entrepreneurs with the knowledge and skills to increase the competitiveness and sustainability of their operations through the EFSE Development Facility, bringing the total number of people benefitting from the technical assistance up to more than 37,000 at the end of 2022.
EFSE Board Chairperson Klaus Müller said: “With the outbreak of Russia’s war of aggression in 2022 touching every country EFSE is involved in, the fund has stepped forward and stood with its partners. As the war and its economic impact continue to contribute to a difficult environment across much of the EFSE region, our partners and the micro, small and medium enterprises we finance demonstrate their fortitude, tenacity, and determination to succeed every day. This spirit, bolstered by ongoing support and solidarity, shows us they are as strong as ever. Empowering and building resilience has been our strategy, which has proved the correct one for achieving significant and lasting impact, as the report shows.”
Click here to read “Empowering and Building Resilience: The EFSE Impact Report 2022.”
An impact investment fund established in 2005, the European Fund for Southeast Europe (EFSE) aims to foster economic development and prosperity in Southeast Europe and the Eastern Neighbourhood Region by investing in the success of micro and small enterprises as well as improved living conditions for private households. As access to financial services is key to developing this segment, EFSE focuses on helping local financial sectors strengthen their ability to provide responsible financing for this target group. Alongside its investment activities through local partners, EFSE multiplies its impact through the EFSE Development Facility, which provides technical assistance, training, and other nonfinancial support to entrepreneurs and institutions. The fund’s impact management system, through its advisor Finance in Motion, underwent an independent verification by impact auditor BlueMark affirming strong Operating Principles for Impact Management alignment in 2022.
EFSE was initiated by KfW Development Bank with the financial support of the German Federal Ministry for Economic Cooperation and Development (BMZ) and the European Commission. As the first public-private partnership of its kind, EFSE draws its capital from donor agencies, international financial institutions, and private institutional investors.
Finance in Motion GmbH, Germany, serves as EFSE’s advisor and Hauck & Aufhäuser Fund Services S.A., Luxembourg, acts as manager.