The 6th Annual Meeting of the European Fund for Southeast Europe (EFSE) opened in Tbilisi, Georgia, on May 31, 2012, with participation of more than 300 international experts.

The two-day event, co-hosted by the National Bank of Georgia, kicked off with a review of the EFSE's achievements in 2011 and announcements of new loan agreements, which are supposed to boost the availability of financing to micro and small enterprises (MSEs) in the target region of Southeast Europe (SEE) and the European Eastern Neighborhood Region (ENR).

Subloans to MSEs and private households for home improvement via local partner lending institutions (PLIs) in 2011 were up markedly from 2010: by 56% to EUR 429 million. With more than 300,000 subloans totaling EUR 1.8 billion since the EFSE's inception in 2005, the Fund has made a major impact in terms of securing and generating employment throughout the target region - 315,000 jobs to date.

Opening the event, Georgian Prime Minister Nika Gilauri praised the comfortable investment environment the country provides for investors and presented the results of the successful fight against corruption, PanARMENIAN.Net correspondent reports from Tbilisi.

Commenting on the Fund's performance, Monika Beck, Chairperson of the EFSE Board of Directors, said: "The EFSE closed the year standing on firmer foundations and strengthened in scope and resources. We do not stop here as we look to the years ahead with confidence, eager to contribute, together with our partners, towards job creation and prosperity in the EFSE's target regions. In addition to our ongoing investment activities, we have launched a series of initiatives to better understand the financing and technical assistance needs of our partner institutions... And finally, we started a major initiative to attract further funding, with emphasize on private investors."

Ms. Beck also mentioned that with the EFSE's support, the Central Bank of Armenia, through its subsidiary, Small and Medium Business Credit Support CJSC, provided dedicated funds to a newly established local currency window to support dram-denominated loans.

In addition, the EFSE closed another nine local currency investment transactions with PLIs, increasing the share of these investment transactions to 21.4% of the Fund's outstanding portfolio of EUR 735.6 million at year-end 2011.

Besides, the EFSE conducted a Stakeholder Survey in the target regions throughout March and April 2012 to illuminate the potential risks and medium-term market opportunities and capture views on the level of Responsible Finance practices in the various markets. the survey included 71 respondents from 14 countries in SEE (68%) and ENR (32%), including top and senior management from the Fund's PLIs (69%) - commercial banks (75%) and microcredit organizations (25%) - as well as central banks, microfinance and banking associations, credit bureaus, etc.

Client over-indebtedness and unfavorable microeconomic trends rated as the greatest obstacles to economic development, followed by financial gaps/funding constraints, weak credit risk management and competition and/or market overheating.

The two main opportunities in the respondents' view are the capacity of IT/technology innovations to create new markets and distribution channels, and the ability of the small and medium enterprise (SME) market segment to generate employment and bolster consumer demand.