Micro and small businesses in the Western Balkans have been particularly hit by the COVID-19 pandemic. To help them recover from the crisis, the European Fund for Southeast Europe (EFSE), supported by the European Union, has provided €43 million loans to ensure short-term SME survival and long-term support to their recovery, to be channelled through nine microfinance and small business lenders in Bosnia and Herzegovina, Montenegro and Kosovo. These loans will help micro and small businesses overcome the post-pandemic challenges and continue providing employment and income generation in the long term.
The European Fund for Southeast Europe (EFSE) was established in 2005 by the German development bank KfW, with the support of the European Union, the German Federal Ministry of Economic Development and Cooperation, and other public and private investors.
EFSE fosters economic development in Southeast Europe through the provision of finance to micro and small enterprises and to private households, with a special focus on rural areas, youth and women-led businesses.
Since the fund’s inception, the EU has contributed €87 million in shares, which, together with the other stakeholders, have helped leverage €7 billion loans for SMEs. Thanks to this financial support, micro and small enterprises have been able to employ more people and generate more income, which in the long term has strengthened their resilience to economic pressures, including the recent COVID-19 pandemic. Since the spread of coronavirus pandemic, the priorities of the Fund have been redirected to support the recovery of the businesses that suffered the most in the region.
The European Commission is now in the process of acquiring additional shares worth €10 million to further contribute to the recovery of the private sector in the Western Balkans. This is part of EU Economic Reactivation Package of €455 million launched earlier in the year.
- Publication date
- 29 June 2020
- Directorate-General for Neighbourhood and Enlargement Negotiations