EFSE lends €20 million for housing finance in Bulgaria

Microfinance Focus, Sep 24, 2010: The development finance fund European Fund for Southeast Europe (EFSE) has signed a loan agreement with Raiffeisenbank Bank of Bulgaria on Thursday, providing the Bank with EUR 20 million to be used for on-lending to lower income private households in Bulgaria to finance housing improvements, renovations, enlargements, reconstruction as well as home purchases. It is EFSE’s first loan agreement with the Bank.

With the loan agreement with Raiffeisenbank, one of the largest banks in the country, the total amount of financing EFSE has offered to Bulgarian financial institutions since the start of its involvement in the country in 2008 to support access to finance for local micro and small enterprises and private households, increases to EUR 30 million.

“EFSE is pleased to have found in Raiffeisenbank in Bulgaria, a new, well-established partner to increase the availability and affordability of housing finance particularly to low-income private households in Bulgaria”,said Dr. Klaus Glaubitt, Chairman of the Board of Directors of EFSE.

Mr. Momtchil Andreev, CEO of Raiffeisenbank stated, “Thanks to this credit line, Raiffeisenbank will provide some of the best conditions on the Bulgarian market for mortgage and housing loans for private individuals. In addition, as the interest rate on loans is based on a generally accepted European index, the borrowers can monitor its movements on the market”, said.

To ensure transparent pricing, the interest rate of the housing loans provided by Raiffeisenbank under the EFSE credit line is based on the European index EURIBOR – the rate at which euro inter-bank term deposits are offered by one prime bank to another within the Euro zone. Borrowers can also follow its movements on the market and predict the price of their loan.

EFSE offers long-term funding instruments to local financial institutions for on-lending business loans to micro and small enterprises (MSEs) as well as housing loans to low-income private households in Southeast Europe.

Since its inception in December 2005, EFSE has offered EUR 822 million in financing to commercial banks, microfinance institutions and non-financial institutions, facilitating a total number of more than 238,000 MSE and housing loans.

Initiated by KfW (The German Development Bank), the EFSE is a Public-Private Partnership that combines funds from various private investors, European governments an international financial institutions, including: European Commission, Federal German Ministry for Economic Development and Cooperation (BMZ), the governments of Austria, Switzerland, Denmark and Albania, KfW, IFC, FMO Netherlands Development Finance Company, European Bank for Reconstruction and Development (EBRD), European Investment Bank (EIB), Oesterreichische Entwicklungsbank (OeEB), Deutsche Bank and Sal. Oppenheim.

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