EFSE is the successor of various development finance initiatives known as the "European Funds for Bosnia and Herzegovina, Kosovo, Montenegro and Serbia" that were implemented in 1998 as a post-conflict reconstruction effort in Southeast Europe. These European funds were merged in one new Fund, the EFSE, in 2005. EFSE is a public-private partnership and a microfinance investment fund that provides sustainable, long-term funding to financial institutions in Southeast Europe, with the aim of helping micro and small enterprises to grow and improve the quality of life for thousands of private households.