The European Investment Bank (EIB) is investing EUR 25 million in the European Fund for South-East Europe (EFSE), which will onlend the EIB funds via intermediary financial institutions to micro and small enterprises and private households. The objective of the EFSE is to make the majority of its investments in the Western Balkan countries and the rest in Bulgaria, Romania and Moldova and possibly other countries of South-East Europe.

EFSE operations are important to the further economic development of South Eastern Europe in terms of job creation and poverty alleviation.

The EIB funds will improve the access of local small and micro enterprises as well as households to medium and long-term finance to address their investment needs. This is the Bank’s first structured finance operation in this region, diversifying the EIB products offered in South-East Europe and sending a positive signal to the local financial sector.

Source: www.bei.org

The prime objective of the EIB, the European Union’s long-term financing institution, is to contribute towards the integration, balanced development and economic and social cohesion of the Member States by financing sound investment. EIB financing operations in the Western Balkans contribute to the integration process of the countries of this region with the European Union. EIB support helps to foster the European perspective that has been instrumental in providing incentives for political and economic reform and encouraging social reconciliation in the region.

Support for the development of micro-enterprises, small and medium-sized companies and municipalities is an EIB priority. This type of EIB lending helps to increase the productivity and competitive capacity of SMEs and micro-enterprises, which collectively make an important contribution to economic growth, modernisation and employment.

Since 1995, the EIB has provided intermediated loans to support the smaller investments of SMEs and municipalities in the Western Balkans totalling EUR 510 million (representing 20% of total lending in the region). Intermediated loans granted since 1990 amount to EUR 215 million in Bulgaria and Romania and EUR 470 million in Romania.