Vous êtes sur la page 1sur 20

THE ACTIVITIES

OF SIDI
AND ITS PARTNERS

INTERNATIONAL SOLIDARITY FOR DEVELOPMENT AND INVESTMENT


Table of Contents
A brief guide to SIDI 4

Review of the work carried out in 2008 4

4
Solidarity financing in 2008
A portfolio of €9.3 million invested in 62 partners in 28 countries ACTIVITÉS DE LA SIDI
ET DE SES PARTENAIRES

Disinvestments in line with forecasts


A dual priority confirmed in Africa and in the rural world SOLIDARITÉ INTERNATIONALE POUR LE DÉVELOPPEMENT ET L'INVESTISSEMENT

Risk-taking in accordance with the shareholders’ objectives

Design and production: SIDI - Poussières d’Étoiles - Courtaboeuf Phone: 33(0)1 60 92 42 72


5
Solidarity support in 2008
A multiple and adapted form of support
Support financed by the “Solidarity Chain”

Generating social added value 7

8
1. Providing accessible and flexible support
Adapting to partners’ difficulties INTERNATIONAL
Promoting management of the social dimension SOLIDARITY FOR
2. Sharing the risks adequately and patiently 10
DEVELOPMENT
Participating in the capital of the LFSs AND INVESTMENT
Lending in local currencies 12, rue Guy de la Brosse / 75005 Paris
Making a difference in crisis zones Phone: 33(0) 1 40 46 70 00
11 Fax: 33(0) 1 46 34 81 18
3. Adapting services to the local context
Website: www.sidi.fr
Financing the producers’ organisations
Promoting value-added in rural areas
Promoting solidarity credit unions

Glossary
14
4. Ensuring the institutional viability and social goals of LFSs
Reinforcing the governance of the LFSs ACP: Africa, Caribbean, Pacific

15 EU: European Union


5. Sources of support
JIF: Joint investment Fund
Consolidating the Solidarity Chain for Financing
LFS: Local Financial Services
Investing in refinancing tools
MFI: Microfinance Institution
Investing in second-tier structures
MFIC: Microfinance Institution engaged in a process of consolidation
Networking and alliances
MFIP: Microfinance Institution with a high potential

Leverage effect: When each SIDI financial contribution is


SIDI’s 2008 Financial Statements and Portfolio 17
accompanied by financial contributions from other public or private
17 sources.
Balance Sheet at December 31, 2008
17
MUSO: Solidarity Credit Union
Income Statement at December 31, 2008
PO: Producers' Organisation
18
SIDI’s 2008 Map of Financial Partners
PAVRA: Promotion of Added Value in Rural Areas
19
2008 List of Partnerships
SCF: Solidarity Chain for Financing
19
Governance at June 12, 2009
TA: Technical Assistance

Umbrella: so-called secondary level institution whose role is to


support MFI

2 2008-THE ACTIVITIES OF SIDI AND ITS PARTNERS


Chairman’s message
25 years of financial solidarity

Dear friends, dear solidarity shareholders, I would the institutional, financial and social consolidation in order to provide an effective response to the
first of all like to warmly thank all of those who of its partners. sector’s needs (thanks to the leverage generated
gave a positive response to the call launched in through the mobilisation of public funds) and also
October of last year to increase SIDI’s capital in The 2009-2012 plan to share risks. New funds specifically designed to
order to provide your “instrument” with the fi- address the needs of rural financing are currently
nancial resources required to continue to fulfil its being created for Africa (FEFISOL) and Central
mandate as a social investor. After 25 years of For the 2009-2012 period, SIDI has decided to America and the Andean countries (FOPEPRO).
working at the service of solidarity financing, the pursue its goal of financing the rural world
successful rights issue confirms the vitality of the through different categories of partners and tools, Finally, here are the main lines of ac-
“solidarity chain for financing”, which is aimed at in order to provide a range of services adapted to tion that will guide us until 2012:
those who are excluded from financial services meet demand and to optimise the resources and
throughout the world. the Social Added value of its action: • Contribute to the long-term improvement of
• Local actors striving to develop the PAVRA, by rural producers’ income
The completion of the 2006-2008 favouring the access of people living in the rural • Guarantee, support and communicate on the
strategic plan. areas to the local and/or international market Social Added Value and the environmental res-
which, in turn, guarantees them fair payment. ponsibility of both SIDI and of its partners
On 31 December 2008, SIDI completed the im- • Networks of MUSO (solidarity credit unions). The • Guarantee SIDI’s equilibrium and social and fi-
plementation of its three year plan for the period MUSO are not only effective savings and finan- nancial continuity
2006-2008, in which it established the priority of cing instruments, but also provide a platform for Thanks to our recent rights issue, the amount of
targeting the rural world, particularly on the Afri- exchanges and mutual aid. They are also condu- loans planned between now and 2012 reaches
can continent. All of the financing provided over cive to the creation of dynamics that drive local €14 million. The leverage effect that is expected
the course of this period has been directed at the development and social change. to be generated through the regional financing
rural areas: today, 63% of SIDI’s loans are provi- • MFI that require consolidation: this type of part- mechanisms should enable us to achieve a port-
ded in those areas. Furthermore, the work carried ner is at the very heart of SIDI’s core activities. MFI folio of €60 million.
out in the rural areas led to the definition of a are institutions that require support at both the fi-
more “inclusive” approach known as the “Pro- nancial and institutional levels. They often have I would now like to invite you to discover the ac-
motion of Added Value in Rural Areas - PAVRA.” greater technical assistance needs and require a tions undertaken and the values promoted with
Moreover,, the work carried out over a three year particularly demanding and patient form of sup- them as you read this 2008 activity report.
period to seek “social and developmental viabi- port.
lity” in our actions and those of our partners • MFI that have a great level of potential and have
confirmed SIDI’s “Social Added value”. already been SIDI partners for several years. SIDI
Thanks to the choices made by its shareholders, continues to be attentive to their investment re-
SIDI is able to go a long way in terms of sharing quirements with a view to establishing comple-
risks with its partners. An analysis of the portfolio mentarities between the social partners and as
shows that the solidarity investment work carried part of the on-going efforts to maintain a balance
out does, indeed, bear fruit in the long run. Seve- between SIDI’s financial and social viability.
ral investments made some ten years ago in coun- • National or sub-regional institutions that refi-
tries that were experiencing difficulties at that nance the Local Financial Services (LFS). Since SIDI
time, but which benefited from regular and conti- only has limited resources, it seems appropriate to
nuous support, are now showing prospects of a concentrate its interventions through “secondary
return on investment and this encourages SIDI to level” - umbrella - instruments and to search ad-
open up new fronts for solidarity financing in dif- ditional financial resources from public and pri-
ficult contexts (Palestine, Haiti...). vate donors, in order to create a leverage effect.
SIDI is therefore striving to strike the right balance • Continental funds: SIDI has embarked on an in- Christian Schmitz
between the level of return on its investments and tervention strategy with other European alliances Chairman of the Board, May 2009.

2008-THE ACTIVITIES OF SIDI AND ITS PARTNERS 3


Review of the work carried out in 2008
The remarkable expansion of microfi- Solidarity financing in maintaining its focus on the rural world
nance has shown that, despite its li- and Africa.
mitations, it is an effective development 2008
tool, notably because it serves to re-
duce the “vulnerability” of its benefi- In 2008, the microfinance sector was mar- A portfolio of €9.3 million invested in 62
ciaries when confronted with the ked by two phenomena that were some- partners in 28 countries
unexpected. SIDI takes part in this pro- times contradictory. On the one hand, the
cess in an original way by supporting appearance of new actors (commercial During the course of 2008, SIDI has provi-
a network of partners who provide fi- banks, specialised investment funds, inter- ded financial support for 62 partners for a
nancial services to the local populations net-based direct collection systems) has at- total of €9.3 million. This significant in-
who are excluded from the traditional tracted more capital to the sector, often crease (+24% compared to 2007) has
banking circuits. designed, above all, to be financially profi- been coupled with several important mo-
table. On the other hand, the financial, fol- vements, with €2 million of disinvestments
lowed by the economic, crisis has and the commitment of a further €3.8 mil-
aggravated the difficulties encountered by lion.
many LFS. Not only have they seen an in-
crease in the number of late repayments Six new partnerships were established du-
by their clients, but they have also expe- ring the year: ADAPS in Madagascar, ES-
rienced greater difficulties in financing CALES JAPPOO in Senegal, FECECAV in
themselves. Togo, CORECAFE in Ecuador, CAFEPERU in
It is in this difficult context that SIDI, with Peru and FAIR TRADE LEBANON in Leba-
the support of the Solidarity Chain for Fi- non. These partnerships represent only
nancing (fig. 1), has continued its activities, 10% of SIDI’s investments over the course
A freezer in Senegal, powered by solar panels
provided by the UGPM’s programme

A brief guide to SIDI.


SIDI, International Solidarity for Development SIDI supports its partners via two complemen- SIDI is active in solidarity financing, mobilising
and Investment, is a limited liability solidarity tary means: individuals and institutions in the North who
company created in 1983 by the development choose to give SIDI the financial means to carry
NGO CCFD -Terre Solidaire (the Catholic Com- • By increasing their financial resources, in the through its actions and who give priority to
mittee against Hunger and for Development). form of equity financing, loans, guarantees and human, social and environmental benefits. As a
SIDI promotes a social and solidarity economy searches for additional resources from interna- result:
by locally consolidating individual and collective tional institutions.
economic activities in the countries of the South • SIDI’s shareholders share the risk taken on by
and the East. • By offering tailored technical support to im- the institutions in the South, without any expec-
prove governance, strategy, management, trai- tation of financial dividends;
Its activity consists of financial and technical sup- ning, diversification, networking, etc. • Savers from the “Hunger and Development”
port to Local Financial Services (LFS), which pro- mutual investment fund share the proceeds from
vide financial services tailored to groups SIDI’s capital of 9 million euros, which was raised their savings in order to defray a portion of SIDI’s
excluded from traditional banking circuits. The to 13 million euros in April 2009, is invested in technical support.
goal is to promote the consolidation of these 62 partners in 28 countries and its consultancy For 25 years, this Solidarity Chain for Financing
structures so that they can offer sustainable ser- budget amounted to 1.76 million euros in 2008. has enabled SIDI to conduct sustainable actions
vices such as savings, loans, training, market ac- Its activities, led by a team of 11 geographical with its partners and to promote their own in-
cess and risk-pooling. desk officers, assisted by 15 volunteer experts, dependence.
strive to make sustainable improvements in the
well being of the populations.

4 2008-THE ACTIVITIES OF SIDI AND ITS PARTNERS


of the year – since the majority of the fi- Furthermore, Africa continues to be a main cers’ organisations and rural enterprises.
nancing provided in 2008 was designed to focus of SIDI’s attention, since the amount Half of SIDI’s portfolio is invested in MFI that
bolster the means of its long-standing of its portfolio dedicated to this continent have a great deal of potential (fig. 3)
partners. The average amount of invest- remains stable at 43% (fig. 2).
ment per partner rose to €150,000 (com-
pared to €134,000 in 2007). Risk-taking in accordance with the sha- Solidarity support in 2008
reholders’ objectives
Disinvestments in line with forecasts
As of 31 December 2008, 56% of SIDI’s SIDI is currently supporting 85 part-
The disinvestment figure of €2 million refers portfolio was committed in local currency, ners in 32 countries (62 of which
to the repayment of maturing loans (81%) down from the previous year’s figure of have benefited from financial sup-
and the withdrawal of guarantees (10%). 66%. This is explained by the number of in- port).
The remaining 9% represents the sale of vestments made in the countries that use
equity shares taken in the LA-CIF fund in the dollar as their currency of reference,
Latin America, which closed at its maturity such as those in Latin America. A multiple and adapted form of support
date and the AMRET fund in Cambodia, Furthermore, investment in the capital of an
from which SIDI withdrew to the benefit of LFS continues to represent SIDI’s favoured The aim of the support provided by SIDI is to
new social investors whose means are in form of intervention tool, due to its long- ensure the sustainability of the actions un-
keeping with the needs of the rapidly ex- term and solidarity-based nature and such dertaken by the LFS so as to bring about a
panding institution. interventions have remained stable and long-term improvement in the situation
constitute 43% of the portfolio. faced by their beneficiaries.
A dual priority confirmed in Africa and in SIDI is always present in the areas that are
the rural world considered to be “at risk” (Palestine, the In 2008, this support focused on 5 main
African Great Lakes Region) and in 2008 it areas:
All of the new partners accord priority in has strengthened its presence in Lebanon • the internal organisation of the LFS: ac-
their work to the rural world and the majo- and Madagascar and has renewed its in- counting, information systems, human re-
rity of the investments provided over the vestments in Haiti. sources;
course of the year were targeted at rural fi- Finally, SIDI strives to invest in structures • governance, strategy, creation of new pro-
nancing. By the end of the financial year, that develop financial services for their ducts;
support for the rural world represents 63% members, even though they are not MFI: • analysis and monitoring of their portfolio;
of the total portfolio. . 30 of its partners are associations, produ- • reflection upon their Social Added Value;

DIF Figure 1. The Solidarity Chain for Financing


Revenue from joint in-
Capital
vestment fund and CCFD
€ 9 million
€ 1.1 million/year
Mobilisation of funds
Refinancing fund Technical Assistance fund from alliances

LFS : Local financial services

PO: Producers’ organisations

LFS PO LFS LFS PO LFS DIF: Development Incentive Fund

Figure 2. Geographical breakdown of the portfolio in 2008


Eastern Europe 16%

Mediterranean Basin 10%

Africa 43%
Asia 11%

Latin America 20%

2008-THE ACTIVITIES OF SIDI AND ITS PARTNERS 5


• negotiation of complementary resources quired on the third and final year of the Eu- more specifically, 66% of the costs related
from third party entities (banks, NGO, public ropean Union’s co-financing (EU/ACP). to the provision of support and accompa-
agencies…). Finally, in accordance with the objectives of nying measures).
This support is provided by SIDI’s team of 11 the strategic plan, 66% of the time spent to - Furthermore, SIDI has negotiated
geographical desk officers who, in turn, are provide support and advice has been dedi- €534,000 in co-financing, 68% of which
assisted by volunteers, all of whom are reti- cated to SIDI’s African partners (fig. 4). Fur- comes from support provided by the Euro-
red professionals in the banking, finance or thermore, 18% of the time has been spent pean Union (UE/ACP). The African continent
enterprise sector. In 2008, the support pro- with partners engaged in a process of has been the main beneficiary of this co-fi-
vided by volunteers represented almost one consolidation and 28% with rural structures nancing (81%).
quarter of the 2,181 days dedicated by SIDI (producer organisations, rural enterprises, The remainder of SIDI’s income comes from
to the provision of support/advice to the solidarity credit unions). the revenue generated by its own activities:
partner LSF (with a further 1,142 working - SIDI’s portfolio generated €563,000 in
days dedicated to the identification of new Support financed by the “Solidarity 2008, which represents a significant in-
partners and horizontal issues) Chain” crease on 2007 (+79%) thanks, notably, to
In 2008, these support and accompanying an increase in the dividends received as well
measures represented an average of 23 The support provided to SIDI’s LSF partners, as the interest earned on loans.
days per partner, mostly taking the form of which enables them to benefit from a cus- - Finally, SIDI has benefitted from an ex-
on the ground support missions. tomised form of support in a wide range of ceptional income of €879,000, thanks to
A budget of €1.76 million was required to areas, is generally provided free of charge. the negotiated sale of a part of its invest-
fund these support measures (or 73% of Indeed, SIDI’s economic ethos is founded ments. Rather than withdrawing from its
SIDI’s operating costs, with the remaining upon a “Solidarity Chain for Financing”, partners’ capital in order to generate an
27% being dedicated to “head office” ex- which makes it possible to mobilise funds in added value, SIDI’s decision in that case was
penditure), up 9.5% on the corresponding the North in order to support the partners motivated by the fact that the partner in
figure for 2007. This increase is due, in part, in the South and the East: question is now autonomous and in the
to the considerable amount of preparatory - First of all, the CCFD-Terre Solidaire fi- process of becoming financially viable.
work carried out prior to the creation of two nances SIDI’s action through the shared re-
investment funds, namely the Fund for Latin venue generated by the “Faim &
America (FOPEPRO) and the Fund for Africa Développement” (fig. 1) Joint Investment
(FEFISOL), as well as the follow up work re- Fund, which covers 48% of the costs (and,

Figure 3: Breakdown of the portfolio per category in 2008


MUSO 1%
FUNDS 10% Umbrella: so-called secondary level institution
whose role is to support MFI
PO 6% MFIC: Microfinance Institution engaged in a
MFIP 45%
PAVRA 9% process of consolidation
MFIP: Microfinance Institution with a high
Umbrella 10% potential
MUSO: Solidarity Credit Union
PO: Producers’ Organisation
MFIC 19% PAVRA: Promotion of Added Value in Rural Areas

Figure 4: Breakdown of support per region in 2008 (not including identification


of new partners and cross-cutting issues)
Eastern Europe 6% Caribbean 3%
Mediterranean Basin 13%
Asia 8%
Africa 66%
Latin America 11%

6 2008-THE ACTIVITIES OF SIDI AND ITS PARTNERS


Generating
social added value

The 2009-2012 strategic plan is fully in line with the Social Viability and De-
velopment (SVD) work that began in 2001. It confirms the unyielding conti-
nuation of one of SIDI’s essential pursuits: to give impetus to the partners’
sustainable social change with the help of the Solidarity Chain for Financing.

One of the most salient conclusions to emerge from the SVD work was a definition
of the five areas where SIDI generates social added value:

1. Support - SIDI provides accessible and flexible support, designed to meet the
specific needs of each partner.
2. Risk - SIDI shares risks in an adequate and patient way
3. Adaptation of services - SIDI adapts its services to the local context in order
to generate social added value.
4. Governance - SIDI is committed to institutional viability and to maintenance
of its partners' social purpose.
5. Leverage effect - SIDI mobilises additional resources for its partners.

A social audit of activities will be prepared starting in 2009 and will detail SIDI’s results
from these five areas, accompanied by key figures. The various facets of SIDI’s activities
in 2008, as explained below, are in step with these five areas.

A solidarity credit union meets in


Bukavu, in the Democratic
Republic of the Congo
Photo SIDI

2008-THE ACTIVITIES OF SIDI AND ITS PARTNERS 7


1. Providing accessible suggest sustainable solutions. to benefit their customers above and
beyond a purely financial procedure. But
and flexible support In application of that policy, SIDI expanded what social goals do they pursue and what
its original offer for financial support to the means do they have to achieve them?
SIDI strives to give individualised responses Fédération des Paysans du Fouta Djalon To answer that question, SIDI set up in
to its partners’ expectations. It tailors its (Guinea) by paying for certified potato 2001 a Social and Development Viability
services and its volume of support to re- seeds for its members. SIDI was then reim- group that, along with voluntary partners,
quests and to the type of partner. Further- bursed from the proceeds generated by the prepared a methodology to ensure that the
more, thanks to donations from the SCF, sale of the crop. This arrangement enabled LFS are able to do the following:
SIDI is able to adapt its financial circums- the farmers to pursue their livelihood with - clarify their social goals,
tances to local needs and contexts, contri- quality inputs at a reduced cost to the - set in motion the right guidance for
buting technical assistance that is cash-strapped Fédération grappling with a these goals over time.
appreciated, useful and seldom charged to highly inflationary context.
the partner. The aim is to lead all these partners
Another example concerns the Mogtedo through this procedure.
Lastly, SIDI does not set prior limits on the rice farmers’ co-op in Burkina-Faso that
length of its partnerships, thereby enabling was confronted with a sharp reduction in In 2008, along with the partners, several
it to appreciate the context in which it acts, the harvest caused by the drying up of a initiatives were started or made progress.
build relations of trust with its partners and retaining reservoir, which jeopardised its Hereafter are some examples:
understand and promote its partners’ so- ability to repay its loans. After conducting
cial added value vis-a-vis the beneficiaries. an evaluation mission, SIDI agreed to re- • With a local consultancy, SIPEM set up a
In 2008, this support activity involved a negotiate the loan, which meant that the monitoring tool for customer vulnerabi-
number of partners in difficulty. SIDI was co-op could allocate and resume its loan lity, using criteria such as health, educa-
also able to boost its support to the ma- repayments. tion, level of schooling and family
nagement of the social dimension. savings.
Promoting management of the so- • In Mali, BMS and SIDI organised at the
Adapting to partners’ difficulties cial dimension end of 2008 a workshop on social per-
formance in the microfinance sector; the
When an LFS is in financial straits owing SIDI maintains that it is essential for the event was highly appreciated by the
to difficulties in repaying loans, SIDI takes partner LFS to follow practices that are in many participants and led to concrete re-
the time to work on the causes in order to line with their social vision. They all aspire sults (see focus 8).

Focus n° 1: gramme. The UGPM first of all closely as- process them (and therefore make joint in-
Ten years walking along with the sesses the applicant families, enabling them vestments); in order to obtain the right price,
UGPM in Senegal to put together a project meant to “get one must avoid using itinerant traders. A
them out of a hole” (usury and seasonal double strategy was therefore devised to
SIDI and the UGPM began their partnership shortfalls) by creating or increasing econo- find new marketing circuits and to generate
in 1995, initially to develop solidarity credit mic activities that correspond to their know- solar energy. This energy provides power for
unions in the area (90 villages and 10,000 how. Then, with the support of SIDI, the homes (mainly to help children in their stu-
inhabitants) and then to finance the instru- UGPM finances the family-run farm, in ac- dies), for irrigation pumps, and for freezers
ment created by these credit unions, namely cordance with the adopted plan. (that make fish available at a lower cost).
the CREC (Caisse Rurale d'Epargne et de So far 80 family-run farms have benefited
Credit – Regional Savings and Loans Fund), from the support of the UGPM, with mixed This partnership between the farmers’ or-
which collects savings, grants loans and re- results: in a difficult context (poor soil qua- ganisation and SIDI has enabled both struc-
finances the credit unions. lity, lack of finance…) it is not easy to esta- tures to evolve. It is essential to speak
blish an appropriate structure for a family’s clearly and openly to one another and to
Since SIDI and the UGPM both believe fa- economic activities (farming, livestock rea- maintain the rigour and discipline that is re-
mily-run farms (rural economic entities that ring, small-scale commercial and craft acti- quired by solidarity financing. “Walking
bring together parents and their offspring, vities, market gardening, seasonal along together” requires the establishment
who have established their own family, employment in the city). of real human relationships, regardless of
under the same roof) to be key economic However, one observation has emerged the membership basis or situation of the
entities in the rural world, their next step quite clearly: in order to promote the goods partners.
was to launch a specific financing pro- produced in the rural areas, one has got to

8 2008-THE ACTIVITIES OF SIDI AND ITS PARTNERS


• With CAC la Florida in Peru, SIDI finali-
sed a diagnosis by zone of the situation
of the members and their families. CAC
used it as a basis for decisions relating
to its 2008-2013 strategic plan, which
contains clear social goals. This method
was also adopted by the Corporación
Café Peru that brings together six co-ops,
including CAC.
• A mission was sent to Fondefer in Nica-
ragua and Red Fasco in Guatemala, with
a view to initiating SIDI support for trai-
ning and management of the social di-
mension in co-ops that belong to these
networks.

Management of the social dimension is


fundamental for SIDI in the sense that it
leads to closer ties between the institution
and its customers, better adaptation and
innovation capacity and, consequently, re-
duced costs and an improved position in
relation to competitors. Furthermore, this An ADAPS cocoa bean
is an important issue for financiers who are producer in Madagascar
concerned about the efficiency of aid.
Above all, management of the social di-
mension is a prerequisite to measuring the
effective and sustainable improvement of
the beneficiaries’ well being.

Focus n°2: Hattha Kaksekar Ltd. in to be supervised by the central bank. At that pital), as well as assuming chairmanship of
Cambodia (HKL) time, SIDI’s support took the form of active the Board – even though SIDI only held a
participation in the drafting of the institu- minority shareholding (19.5 %).
When SIDI began to invest in AMRET in tion’s constitutive documents and its gover- For its part, the HKL leadership team sho-
Cambodia in 2000, it felt that a second part- nance. wed great loyalty to the institution, assumed
nership in the country would enable it to However, in 2002 the central bank decided an increasing volume of work with great in-
work more efficiently and also to get a bet- that, since there had been a significant de- telligence and energy and established a
ter understanding of the national environ- terioration in the loan portfolio, the rene- trust-based relationship with SIDI. In 2000,
ment. SIDI therefore decided to both wal of its approval would be subject to a HKL’s portfolio was worth close to $1.2 mil-
finance and support HKL. Unlike the great swift stabilization of HKL’s operations and in lion, whereas at the end of 2008 this figure
majority of the local MFI, at that time HKL increase in its capital. SIDI then chose to was close to $30 million…
was not led by a foreign donor and was provide enhanced technical assistance to Today, HKL’s success is attracting many new
working with a Khmer team. It also had the Khmer management of the MFI. investors that have significant financial re-
deeper roots in the local rural context. In- A volunteer consultant (a former banker) sources. SIDI’s participation and role will be
deed, its very name, Hattha Kaksekar (“the was heavily involved in this technical sup- reduced over the course of time. However,
farmer’s hand” or the “farmer’s outstretched port, which took the form of 4 to 5 field vi- this partnership validates the vision, mission
hand”) only serves to emphasise its inten- sits per year, the establishment of an action and ambition of the founders of SIDI with
tions. plan, the redefinition of key positions, taking regard to its role supporting local organisa-
part in recruitment procedures, almost daily tions in the developing countries, at the ser-
The following year, the authorities granted monitoring of the development of the ope- vice of micro- entrepreneurs.
HKL approval to become a formal MFI and rations, the search for finance (loans and ca-

2008-THE ACTIVITIES OF SIDI AND ITS PARTNERS 9


2. Sharing the risks ade- cant commitment to SIPEM, amid growing devaluation of the CFA franc, SIDI is main-
competition, at a time when SIPEM wants to taining its commitments in this monetary
quately and patiently start accepting savings deposits. zone and in 2008 granted an initial loan of
50 million CFA francs (76,000 euros) to FE-
One advantage of SIDI’s intervention CECAV, a savings and loan institution in
is that it can accept risk to its own Lending in local currencies Togo that wants to expand its agriculture fi-
capital, as authorised by the share- nancing activities. SIDI has also increased its
holders. MOGTEDO (Burkina-Faso), EACD (Egypt), loan in Haitian gourdes to Fonhsud, in order
FONHSUD (Haiti), JEMENI and NIAKO (Mali), to refinance solidarity credit unions.
Participating in the capital of the LFSs AL AMANA (Morocco), KOKARI and TAANADI
(Niger), SMEA (Uganda), CREC, JAPPOO, MEC
Equity financing in an LFS is a fundamental PROPEM and UGPM (Senegal), FECECAV, UC- Making a difference in crisis zones
means to contribute cheap and stable re- MECS and TIMPAC (Togo).
sources to the LFS so that it can finance its SIDI is continuing its involvement with part-
activities in a sustainable way. SIDI prefers to In the microfinance landscape, it is custo- ners who are struggling with difficult
forgo dividends until the institution has rea- mary for lenders to grant loans in dollars or contexts in Haiti, the Middle East and in
ched significant financial independence. euros in order to avoid the risk of exchange Africa. In these areas, SIDI helps locally com-
rate losses at reimbursement. The exchange mitted partners to increase their support for
At the end of 2008, SIDI held shares in 26 rate risk is therefore borne by the borrowing the beneficiary populations for whom access
structures. It also converted three of its loans institution, which does not always have the to financial services is more difficult and per-
to capital in order to bolster its ties with um- financial capacity to take it on. SIDI wanted haps more necessary than elsewhere.
brella institutions in South America, such as to share this risk and has therefore set up a
Fondefer, a financial instrument of a co-op guarantee fund called the Development In- As a result, SIDI has completed the crea-
network in Nicaragua; Fortalecer, a joint centive Fund that is replenished by women’s tion of a guarantee fund devoted to mi-
structure created by the rural microfinance religious orders and is endowed with 2.3 crofinance institutions in Palestine (see
associations of Peru; and Café Peru, a coffee million euros to cover a share of the ex- focus 4), has reinforced its assistance and
processing and marketing company created change rate losses. Under this mechanism financial involvement in Haiti in the form
by eight producers’ co-ops. Lastly, SIDI has partner LFS can be granted loans in local of a loan to Fonhsud and new partnerships.
supervised several capital increases in Tan- currencies. Forty-four percent of SIDI’s loans In the Great Lakes region, SIDI has acqui-
zania, Cambodia, Kosovo (see focus 5), Mol- are now denominated in local currencies. red a stake in the capital of the CCRD and
davia, the DRC and Madagascar. In this last expanded activities of the geographical of-
country, SIDI decided to maintain its signifi- For example, despite the ongoing risk of a ficer (see focus 3).

Focus n° 3: The need to strengthen


technical assistance in the African Therefore, the situation requires more than just
Great Lakes Region financing and support, rather it requires “lo-
cally-based” technical support that is not only
At the end of a three year period during which long-term, but is also provided on a regular
it had carried out missions in the Great Lakes and frequent basis. For example, many days of
Region, SIDI decided to question the relevance mission were required in 2008 to train the
of its method of intervention in that area. In- CCRD accountant, since it was necessary to
deed, whilst it carried out a large number of train a person who had little accounting know-
days of mission (365 days of mission in 3 ledge to manage the production of accounting
years), with a major increase over the last two information.
years, SIDI also realised that it does not pro- On the basis of these observations, SIDI deci-
vide a sufficient response to its partners’ needs ded to use a method of intervention adapted
and that it does not really know the environ- to the needs of the region, spending more time
ment. for the partners, and to locate itself as closely
The working area is vast and the means of as possible to the areas in which its partners
A meeting between an ACAD team and
transport between the various areas are slow work. To this end, in 2009 the geographical clients in Palestine
and unreliable. Furthermore, the partners also desk officer will be relocated to Bukavu in Sou-
reflect the unstable situations in those areas thern Kivu on a full-time basis.
and although there is a strong desire to move
things forward, there is a huge amount of tasks The relocation of the desk officer will facilitate
be done, without necessarily having the quali- access to Rwanda and to Burundi and will also
fied human resources to accomplish these make it possible to provide a swift service to a
tasks. larger number of clients.

10 2008-THE ACTIVITIES OF SIDI AND ITS PARTNERS


3. Adapting services ducers’ organisations that, as local deve- • To enable rural populations to receive a
lopment vectors, set up savings and loan greater share of the added value generated
to the local context services that are adapted to their members from the processing of farm products.
as a complement to other actions they • Envisage the export of these products
SIDI does not wish to standardise its assis- carry out. and their sale by local production net-
tance to partners but instead seeks to adapt works.
to each situation in order to provide the Promoting added value in rural areas • Become environmentally friendly and
most efficient aid possible. This approach promote local know-how.
has led SIDI to move beyond the microfi- CORECAFE and MCCH (Ecuador), LAO FAR-
nance sphere and to innovate, in order to MERS PRODUCTS (Laos), FAIR TRADE LEBA- In this context, SIDI’s role is:
respond to the particular needs of rural po- NON (Lebanon), ADAPS (Madagascar), • To identify producers’ organisations and
pulations and farmers’ organisations. KOKARI (Niger), CAFEPERU (Peru) and ES- ascertain the viability of an export mar-
CALES JAPPOO (Senegal). keting project or of local sales.
• Identify quality importers interested in
Financing the producers’ organisations This work in rural areas with producers’ or- such products, connect them to produ-
ganisations, conducted as a priority over cers and provide support during the pro-
MOGTEDO (Burkina-Faso), FAPECAFES (Ecua- the last three years, has highlighted a re- cess.
dor), FPFD (Guinea), ALAOTRA (Madagascar), curring lack of financial services. In parti- • Search for subsidies for organic certifica-
FONDEFER/FENACOOP (Nicaragua), CAC LA cular, few MFI finance the processing of tion or conversion and grant pre-finan-
FLORIDA (Peru) and UGPM (Senegal). farm products, despite the fact that far- cing.
ming and the processing of foodstuffs are • Support producers in the creation of fi-
In rural areas, especially in Africa, microfi- a key factor for the development of rural nancial services for their members, or in
nance for farmers is barely getting off the areas. For that reason SIDI began to fi- establishing relationships with MFIs (Ma-
ground. This is due to the wariness of finan- nance producers’ organisations and rural dagascar, Morocco, Lebanon, Tanzania,
ciers who point to recurring risks in the rural businesses that process and market pro- etc.).
areas, i.e. climate, prices of commodities, etc. ducts, locally or via fair trade or organic
outlets. Thanks to its results and promising For example, SIDI joined with Fair Trade Le-
Farmers in these countries have explicitly ex- future, the Promotion of Added value in banon (FTL), an association devoted to the
pressed their need for financial services. Ser- Rural Areas (PAVRA) has become a leading marketing of products from farm co-ops.
vices tailored to their needs can provide theme of the 2009-2012 strategy. Following an evaluation mission and a visit
sustainable change. That is why SIDI is fo- to the co-ops in 2008, SIDI supported it in
cusing on rural areas, in support of the pro- The goal of the PAVRA is: its search for fair trade importers and

Focus n° 4: SIDI innovates in Palestine we support an MFI that performs to a highly acceptable level from a tech-
nical and financial point of view, in the context of a structural crisis that can
The bombardments subjected upon the civil population in Gaza at the end jeopardise its very existence? This process has enabled SIDI and ACAD to:
of 2008 only served to confirm the difficulty of establishing long-term and • gain a better understanding of the nature and the reality of the risk borne
fair peace in the region. And yet the Palestinian population continues to live by MFI in Palestine and, more specifically, of the effects of the political si-
(or to survive). tuation on ACAD’s portfolio. To this end, the ACAD team therefore car-
SIDI has been working in Palestine for 15 years and has been supporting ried out a survey in its agencies.
the Arab Center for Agricultural Development (ACAD) for almost 10 years. • examine ways of covering this risk, whilst at the same drawing a dis-
The ACAD grants loans to small rural farmers and entrepreneurs through 7 tinction between the entity that grants the credit and the guarantor: it is
satellite offices in the West Bank and in Gaza. not possible to respond to the particular nature of this risk with all gua-
rantee systems.
The missions carried out by SIDI in recent years have highlighted the very • design and implement a system to cover the “contextual risk.”
particular conditions related to the work of providing solidarity financing for • mobilise their efforts on a large scale around a complex issue for Inter-
the Palestinians. Indeed, as well as the risks that are inherent in microfi- national Solidarity Organisations in both France and across Europe.
nance, one also has to add the risk related to the illegal occupation of Pa- This led to the creation of the guarantee fund, which has been operational
lestine by Israel, notably with the ongoing construction of Israeli colonies, since 1st January 2008. ACAD provides the guarantee fund partners with
which reduces the rural areas in which the Palestinians can live and produce. details about its risk portfolio on a quarterly basis: any loans which have
The Palestinian partners discreetly refer to this issue as the “contextual become impossible to reimburse as a result of a “contextual problem” is
risk.” The central problem faced by SIDI in providing its support is there- examined by an impartial consultant in Ramallah and is then submitted to
fore that of strengthening the securitization of ACAD’s portfolio and that of SIDI. In fact, SIDI manages the guarantee fund on behalf of its partners.
the MFI sector in general. The existence of this guarantee fund is bringing about a profound change
in the frame of mind of the ACAD loan officers and is enabling them to re-
A long process was then initiated to address this new challenge: how can commence loan activities straight away.

2008-THE ACTIVITIES OF SIDI AND ITS PARTNERS 11


sure payment to farmers upon delivery of
cocoa to ADAPS. Thanks to the support of
a volunteer consultant, it has set up tools
to manage and monitor the amounts of
cocoa sold and stored. Lastly, SIDI, with
ADAPS and AFDI Picardie*, is looking into
an arrangement with a local MFI to enable
farmers to buy rice at harvest time (so at a
better price), in order to store it and eat it
during lean times.

In 2008, SIDI began working in Ecuador


with the CORECAFE company, whose aim
is to sell quality coffee on the national and
international markets and to promote the
ecological and social values of small cof-
fee producers.
Producers’ organisations own 80% of CO-
Laos: traditional silk weaving RECAFE so they control the company’s vi-
sion and use it to enhance the value of
wants to assist it in creating a procedure their production. CORECAFE is the first as-
for analysing and selecting co-ops. sociation of its type in the country to suc-
ceed in placing its coffee on the shelves of
In Madagascar, the Association pour le Dé- large supermarkets.
veloppement de l'Agriculture et du Pay- CORECAFE continues to expand with the
sannat du Sambirano (ADAPS), created in support of SIDI, which granted it a
2001, works in the market gardening sec- $35,000 loan to help develop its produc-
tor and with producers who grow vanilla, tion. A project is underway to organise
coffee, cocoa and pepper. SIDI has had ties roasting, grinding and bagging of coffee in
to ADAPS since 2004. In 2008, SIDI gua- the co-ops and to transfer a maximum of
ranteed a loan granted to ADAPS by a local economic and social added value to the
bank, a subsidiary of BNP Paribas, to en- producers.

*Agriculteur Français et Développement International

Focus n°5: SIDI and KRK in Kosovo in 2008

KRK was created in January 2004 following a project initiated by (FIEK, a federation of KRK’s 37 savings and loans associations, which
ADIE International at the end of the Kosovo war. Today, KRK is the holds 26%) and the foreign shareholders.
leading rural microfinance institution in Kosovo and in 2008 it had
more than 17,000 members in its network of 37 village savings and The consolidation of its equity enabled KRK to borrow from new fi-
loans associations. Indeed, 75% of its loans are granted to the agri- nance bodies. SIDI has made a major contribution to the search for
culture and livestock sector. this finance. It has even granted a loan of €700,000 through the
“Faim et Développement” JIF, together with a bridge loan of
SIDI acquired part of KRK’s capital and took a seat on its board €300,000 from its own equity. Today, KRK is ready to carry on with
when it became a limited company. In 2007-2008 it strongly sup- its activities with sustained growth and to respond to the substan-
ported KRK in its rights issue process, enabling the institution to ac- tial ongoing demands of its rural clients.
cess the funds required for its growth with favorable conditions.
SIDI has been appointed to replace ADIE International to chair the
SIDI and ADIE International have been instrumental in renewing the board, thereby placing it in a good position to collaborate with the
shareholding and have also deployed major efforts in order to main- other board members.
tain a balanced form of share ownership between the Kosovars

12 2008-THE ACTIVITIES OF SIDI AND ITS PARTNERS


ESCALES JAPPOO is a chain of restaurants Solidarity credit unions are a unique orga- (DRC), more than $1 million in savings has
in Senegal that makes use of local farm nisation, invented by Senegal farmers in been built up and been put to work in eco-
products in its kitchens and pays its em- 1995 and later disseminated by SIDI to nomic activities by the members of 600 so-
ployees a decent wage. The first two res- other countries. They are self-help groups lidarity credit unions, who then became
taurants opened up in the tourist zone of whose members make equal contributions 80% owners of their own savings and loan
Saly and 25 direct jobs were created, in ad- to set up a people’s self-managed savings institution.
dition to secondary jobs of musicians, and financing tool. They also help to struc-
crafts people, etc. ture and give cohesion to the sector, in the
Despite some hitches, such as electric sense that they enable the group to ex-
power problems, competition and a fall in change views on their activities and pro-
tourism, the restaurants have managed to blems and to launch joint projects in areas
offer quality cuisine and service. Most of such as healthcare, collective investment,
the employees are their families’ bread- seed purchases, etc. It is also a self-help
winners, which has improved the lives of group, for example its emergency fund can
hundreds of people. Many locals, such as improve access to healthcare.
vegetable farmers and fishermen, have SIDI works in training, information techno-
sold their production at higher prices to the logy, strategy and financing with around a
restaurants than those offered by itinerant dozen organisations that promote solida-
merchants. rity credit unions, particularly in far-flung
The example of ESCALES JAPPOO shows rural areas.
that it is possible to create companies in At the end of 2008, these promoters (far-
Africa for the benefit of rural people and mers’ organisations, development NGOs
youth. However, it requires sizeable invest- and religious orders), were working with
ment in time and money. around 48,000 people who had decided to
join one of the 2,400 listed solidarity cre-
dit unions, more than half of which are lo-
Promoting solidarity credit unions cated in the DRC.

West Africa (Senegal, Mali and Burkina Faso), While the solidarity credit unions cannot
Central Africa (DRC, Rwanda and Burundi), meet all financing needs, they have proven
Haiti and Madagascar. to be efficient at mobilising local savings.
For example, in six years, in North Kivu

Focus n°6: Review of the EU/ACP support project


to further develop activities in rural areas • an extra 120,000 beneficiaries in rural areas have been accoun-
ted for in the 10 institutions supported by the project between De-
In 2005, SIDI, MAIN, the African network and Alterfin/Belgium ob- cember 2005 and December 2008 (an increase of 70%), even
tained a grant of €790,000 from the European Union for a period though this increase is not solely due to the support provided by
of three years, in order to develop financial services in underserved the EU project;
rural areas in 12 African countries and Haiti, and to increase trans- • following the studies and support missions, 13 new products have
parency in the sector. The main focus of the project was: been created, notably at OMIPA/Uganda and JEMENI/Mali. Fur-
• to support the diversification of the financial products made avai- thermore, savings systems have been introduced within several part-
lable to the beneficiaries ners;
• to strengthen governance within the institutions through techni- • the project has financed more than 60 support and training mis-
cal assistance and training missions sions (in the areas of governance, social performance, computer li-
• the development of solidarity credit unions in rural areas. teracy, portfolio...) ;
Completed in 2008, the project is now at the capitalisation stage, • Finally, more than 720 board members and managers have re-
but it is already possible to say that it has led to a considerable in- ceived training thanks to the workshops and training sessions held
crease in support for the beneficiary institutions. Indeed, we can by the MAIN and the KNFP/Haiti on social performance and the
draw the following conclusions in particular: MUSO system.

2008-THE ACTIVITIES OF SIDI AND ITS PARTNERS 13


4. Ensuring the Beyond its role as an active social investor,
SIDI seeks to boost the long-term activities of
institutional viability its partner LFS, without undermining their so-
cial vision.
and social goals of LFS
First off, the aim is to ensure the quality of
The role of SIDI, as a patient investor, is to the investors who seek equity investment in
support over the long-term the LFS partners the LFS. This is particularly important at times
so that they are able to offer financial ser- of capital increases, when the arrival of new
vices, also over the long-term. To achieve investors must be done in harmony with the
that, their role as an institution must be sho- partners’ social vision.
red up, they must be supported in the use of
tools for monitoring and managing their acti- In 2008, SIDI played an active part in the
vities and, lastly, their good governance must search for new investors on behalf of
be supervised. KRK/Kosovo and ensured that KRK’s benefi-
In addition, SIDI must see to it that the part- ciary credit institutions be also part of the
ners’ social vision is in step with their prac- shareholding (see focus 5). As a founding
tices. This entails the preparation of and
active participation in the 23 boards of direc-
tors of which SIDI is a member alongside
other directors and making sure that their
decisions are implemented.

Reinforcing the governance of the LFS

TEMBEKA in South Africa, ASIENA in Burkina-


Faso, HKL in Cambodia, CRG in Guinea, KNFP
in Haiti, KRK in Kosovo, AMSSF in Morocco,
MICROINVEST in Moldavia, TAANADI and KO-
KARI in Niger, OMIPA in Uganda, FORTALECER Partners, the SIDI team, shareholders and
and CAC la FLORIDA in Peru. alliances all met in Paris in October 2008 to
celebrate SIDI’s 25th anniversary

Figure 5 : Breakdown of SIDI’s capital at


31/12/08 (€9 M)

EIGHT EUROPEAN
PARTNERS 5.9%
Focus n° 7: A finance tool for produ- duction activities and its capacity to support the
Other 5.7% cers’ organisations in Latin America: way in which the farmers’ organisations are ma-
CCFD-Terre Solidaire
FOPEPRO naged, thanks to partnership agreements.
ESD 26.8%
26 %
The importance of agriculture as a source of em- Having undertaken preparation and identifica-
ployment in Latin America and therefore as a tion missions over a period of 4 years, SIDI and
key sector in the efforts being made to reduce ALTERFIN have now decided to move on to the
poverty, was confirmed in a study carried out by next stage and to proceed with the joint crea-
SIDI in Bolivia, Colombia, Ecuador and Peru. This tion of this regional finance institution, which
study also analysed the problems encountered fits perfectly within the strategic guidelines of
by small farmers and their organisations when the two organisations. The two partners have
trying to increase their productivity and high- decided:
lighted the need for adequate finance and tech- • to create the FOPEPRO Fund in 2009 for a 10
URSULINES DE nical assistance. The fund that SIDI proposes to year period, in order to support small producers
JÉSUS 7 % set up is therefore designed to provide financial in the Andean and Latin American countries.
FOUR
support for small farmers’ organisations. • to invest $700,000 each to the fund.
FINANCIAL
• to mobilise donors’ funding for the FOPEPRO
INSTITUTIONS 11.2% AUXILIATRICES
17,3% The originality of the fund lies in its targeting of fund.
the rural world, the financing of agricultural pro-

14 2008-THE ACTIVITIES OF SIDI AND ITS PARTNERS


shareholder, SIDI was also mindful of how 5. Sources of support bilised in significant numbers.
the capital increases played out in SIPEM, • Lastly, SIDI took the opportunity of its 25th
HKL (focus 6) and Microinvest and, finally, In its capacity as a social development anniversary to invite 25 partners from the
took part in the transformation of CCRD into player SIDI seeks to mobilise those around it South and East to an event in October 2008,
a limited liability company. with the goal of promoting its vision of so- during which everyone increased their awa-
lidarity financing and to secure additional reness of SIDI’s solidarity financing and pre-
Moreover, SIDI makes sure that its partners’ resources for its partners. Although its own sented their activities to the CCFD/SIDI
decision-making bodies are in a position to solidarity resources are stable, they are not audience, to the public at large and to jour-
get the tools necessary to monitor activities enough to meet the needs conveyed by its nalists. The many partners who attended of-
and to acquire the skills needed for the ef- partners. Furthermore, at a time when com- fered the chance to set up a series of working
fective management of their structure. SIDI mercial microfinance activities are growing meetings on a range of themes, such as fi-
organises training sessions for board mem- apace, SIDI is reaffirming the need to back nancing, agriculture, meetings with alliances,
bers on the preparation and holding of board local, in particular rural, development etc., and headway was made in many issues.
meeting and on how to monitor the appli- players who, despite their social usefulness This gathering of Northern and Southern par-
cation of decisions. and potential, are not yet profitable. ticipants was highly beneficial for the share-
In 2008, SIDI did some positive work to in- holders, savers, the SIDI team and its partners.
troduce tools for monitoring and managing Consolidating the Solidarity Chain It also served to strengthen shared convic-
activities in the Great Lakes Region, and hel- for Financing tions.
ped TAANADI, UCMECS and TIMPAC to ob-
tain a cash monitoring tool. SIDI also The year 2008 was marked by three major Investing in refinancing tools
participated in the strategic planning of Tem- events:
beka, AMSSF, Asiena, Fortalecer and CAC la • First, CCFD-Terre Solidaire and the Crédit SIDI has established a financial and technical
Florida. In addition, it pursued the deploy- Coopératif launched a new shared investment relationship with nearly 70 partners. Most of
ment of software for monitoring solidarity fund designed to finance SIDI’s activities, cal- their needs are increasing, however SIDI on
credit unions. Finally, training for boards of led Faim et Développement Agir CCFD. It is its own does not have the means to keep
directors was provided thanks to financing available at all French banks under the ISIN pace. SIDI therefore introduced an interven-
from the European Union (focus 6): SIDI trai- code FR0010627232. tion strategy via regional funds. This type of
ned directors from CRG, Timpac, Taanadi, Ko- • Next, in order to fund its development in instrument offers a better response to the sec-
kari and Omipa. the next four years, SIDI launched in Octo- tor’s financial needs, thanks to the leverage
ber a 4-million euro capital increase. Des- effect achieved by the mobilisation of donor
pite the financial crisis, or perhaps thanks agencies, and serves to pool and share risks
to it, new and old shareholders alike mo- more efficiently.

Focus n°8: Creating leverage in Mali counts, with a loan portfolio of €50 million and the banking sector in general and the BMS in
deposits of €72 million. It also had a net in- particular. It is for this very reason that, in De-
In 2004, SIDI decided to invest in the Banque come (not including subsidies) of €2 million. cember 2008, the BMS both hosted and sup-
Malienne de Solidarité (BMS-SA), the only fi- ported the organisation of a national
nancial institution of its kind throughout the The BMS works with more that 40 MFI that workshop on the social performance of MFI,
whole of Western Africa. SIDI has a seat on its operate in both rural and urban areas. All of which was conducted by SIDI and was aimed
Board and provides a steady technical banking the requests for credit from viable structures at the whole sector. This meeting led to the
assistance (the costs of which are borne by the have been satisfied, with an annual average creation of a permanent support function for
BMS). of €11 million in outstanding loans. The BMS these performances, located within the Malian
also carries out its actions through associa- Professional MFI Association.
The mission of the BMS, created in 2002, is to tions, cooperatives and other groupings in
favour the financing of SME/SMI through MFI order to reach out to the largest possible num- This type of collaboration between SIDI and a
and also to directly finance small producers ber of low-income Malians; accordingly, al- national level partner, which in turn maintains
who are not able to access bank credit. The most 200 associations benefited from loans relations with many local institutions, serves to
fact that most of the capital is held by MFI re- between 2003 and 2008. generate institutional, financial and social le-
flects the intention to make the BMS become verage.
a financial instrument supporting microfinance. Today, MFI are major financial actors in the fi-
nance sector in terms of resources mobilised,
By the end of 2008, having existed for five and credits distributed and number of people co-
a half years, BMS had 10 agencies spread vered. From this point of view, their social and
across the country and more than 20,000 ac- financial performances have a direct impact on

2008-THE ACTIVITIES OF SIDI AND ITS PARTNERS 15


Two new funds, targeting rural financing, are an Umbrella institution set up by rural mi- large loans in Cambodia, Eastern Europe,
in the process of being created by SIDI and its crofinance associations in the country. As a Peru and Ecuador.
alliances, one for Central America and the An- result, the loan granted to Edaprospo was
dean countries, under the name of FOPEPRO fully converted into Fortalecer equity capi- SIDI also mobilised 534,000 euros in co-fi-
(see focus 7), and the other under the name tal. nancing for the MAIN network (CCFD, Fon-
of FEFISOL, devoted to Africa and more spe- dation GILLES/Belgium), for the structure of
cifically rural areas, combining financial and Networking and alliances the FOPEPRO Fund in the Andean countries
technical support. Their technical arrange- (the Ford Foundation in the USA, FUSM in
ments, strategy and tools were established in Several years ago SIDI took steps to mobilise Spain and CORDAID in the Netherlands),
2008. additional resources: the Fonds Coopératif in Laos (MISEREOR in
• from its alliances and structures in the Germany and MAE in France) and the Great
Investing in second-tier structures North that share its development vision, the Lakes region and Senegal (CCFD).
TEMBEKA in South Africa, REDFASCO in Gua- primary one being CCFD-Terre Solidaire;
temala, BMS in Mali, SMEA in Uganda and • from public financiers and social investors. Lastly, SIDI is pursuing its work with the net-
FORTALECER in Peru. works. In 2008, it did the following:
Sometimes, in countries where financial ser- In addition, SIDI is involved in several net-
vices are plentiful, SIDI believes it is useful to works where it shares its practices, meets • Continued its commitment to the Euro-
concentrate its actions on second-tier struc- other like-minded players and develops joint pean Federation of Ethical and Alternative
tures (Umbrella institutions) and in that way projects. Banks (FEBEA) in order to pursue its projects
optimise its contribution via a leverage ef- in the South.
fect. For several years now, SIDI and CCFD-Terre • Actively took part in the board of INAISE,
Solidaire have been making an effort to a worldwide network of groups involved in
For SIDI, these are strategic instruments that work together in the field, a move that was the social and solidarity economy and, more
make it possible for the MFIs to refinance. formalised in 2008. Both structures support importantly, took part in its first World Soli-
They also encourage reflection on microfi- groups working for social change and share darity Finance Summit that brought toge-
nance, thereby generating greater know- the same vision of a solidarity economy. The ther 150 delegates from 42 countries.
ledge of the sector and facilitating the aim is therefore to capitalise on their com- • Participated actively in the work of the FO-
application of studies on the financial, so- mon experience in development and solida- ROLACFR network in Latin America, which
cial and institutional performance of the LFS rity financing, as well as to work together in brings together 370 MFIs and works to im-
(see focus 8). the field. prove financial services in rural areas.
Eight partnerships are already benefiting • Maintained its commitment to MAIN (Mi-
Since the end of 2007, SIDI has held 10% of from the joint support of SIDI and CCFD: the crofinance African Institutions Network), a
the shares of Stromme Microfinance East solidarity credit unions in the Great Lakes network of 90 African MFI that exchange
African (SMEA), a regional refinancing fund region, the Fonds Coopératif in Laos, the experiences, organise training schemes and
for MFIs in Uganda, Kenya, Tanzania and MAIN network, Fonhsud and KNFP in Haiti, conduct studies. This commitment was given
Sudan, created by the Stromme Foundation FENACOOP/FONDEFER in Nicaragua, CAC shape by financing (cash advances and
of Norway. This fund is managed in Uganda la Florida in Peru and TITEM in Madagascar. loans) and technical assistance (accoun-
by local staff. SIDI also provided a $500,000 Furthermore, SIDI mobilised in 2008 nearly tancy, workshops on social performance
bridge loan to SMEA in 2008 and took part 400 million euros for the direct financing of and searches for finances). SIDI took part in
in governance as a member of the commit- its partners (fig. 6) via its alliances with (in the preparation and guidance of an impor-
tee that grants loans. addition to CCFD) Cordaid in South Africa, tant MAIN seminar in Uganda, with 120
the Caixa Catalunya Foundation for Peru participants from throughout the continent
Furthermore, SIDI began in 2008 to transfer and Andean producers, as well as the North- who exchanged practices on microfinance
its investments in Peruvian MFI to Fortalecer, South investment fund that has granted in Africa.

Figure 6 : Geographical breakdown of financial resources


mobilised from alliances in 2008

CEECS 11% THE CARIBBEAN 1% AFRICA/MAIN 8%

AFRICA 17%

ASIA 23%

LATIN AMERICA 40%

16 2008-THE ACTIVITIES OF SIDI AND ITS PARTNERS


SIDI’s 2008
financial statements
SIDI’s balance sheet at December 31, 2008 in thousands of euro

ASSETS LIABILITIES 2
These are
2008 2007 2008 2007 provisions for
risks and
financial
Net intangible assets 78 89 Capital 9,000 9,000 provisions for
Net financial assets 8,978 7,182 Reserves 269 259 exchange rate
losses.
of which shares and claims 4,159 3,423 Profit/loss for the year 277 10
of which loans 4,634 3,622 3
Provisions on
of which other financial assets 185 137 Total equities 9 546 9,269
loans and equity
investment have
Total fixed assets 9,056 7,271 Provisions2 138 125 since 2004 been
covered by the
F.I.D., a hedging
Loans 1,284 611 mechanism that
Other debts 611 562 applies, with a
few exceptions,
Claims (net value, including co-financing) 545 438 to all investment
Subscribed capital – capital increase 546 - conducted by
Shareholders, current account 149 122 SIDI. It
Cash assets 1 5,302 5,706 F.I.D. International guarantee fund 3 2,292 2,292 comprises
current accounts
1
Cash (including C.D.C. Fund 358 351 of shareholders
F.I.D.), invested CCFD-guarantee - 106 who are
in ethical convinced of the
securities and importance for
investment real Accruals 19 22 SIDI to target
estate. TOTAL 14,922 13,437 TOTAL 14,922 13,437 difficult
intervention
"S.A. SOFIDEEC BAKER TILLY, external auditor, a member of CRCC in Paris, represented by its chairman Mr Fouad EL areas.
M'GHAZLI, has certified without reservations SIDI's annual accounts, ended December 31, 2008."

SIDI’s income statement at December 31, 2008 in thousands of euro


2008 2007
Income Total 1,828 1,833
Services (CCFD and additional income) 1 1,694 1,725 2Other proceeds include fees for
Other products and provision reversal 2 134 108
1This heading mainly comprises attending board meetings,
Charges Total 2,417 2,258
• contributions received from the CCFD application fees, etc.
Current operation income 832 718
to finance support activities (1,1 Wages and salaries 1,140 1,103
million euro). Most of these resources Depreciation expense 19 20 3 These are co-financings
are provided to the CCFD from the
Provision for charges 14 - from international partners
proceeds of the Faim et
Additional co-financings transferred to partners 3 412 418 transferred directly to the
Développement investment fund
Operating profit/loss -589 -426 partners. These funds only
(€604,335 in 2008)
• resources from international partners, Income Total 750 584 transit through SIDI.
which are either transferred to the Income from portfolio (loans and shares) 4 572 315
partners or are spent on financing Income for current assets 29 38
SIDI support. DIF resources 99 56 4 Income from the portfolio
Exchange rate gains 41 4
increases by 82%
Provisions reversal 5 30
Other 5 142
Charges Total 763 165
Provision for financial risks, translation differential 5 5
Provision for risks on shares and loans 480 -
Loan write-down 77 -
Interests on loans 26 26
Disposal of shares, Investment securities 44 18
Exchange rate losses 116 115
Other 15 20
Financial profit/loss -13 419 5
Capital gain from disposals of
Exceptional products5 1,069 117 equity capital
Exceptional charges 190 100
Exceptional profit/loss 879 17
Income taxes 0 0
Net profit/loss 277 10

2008-THE ACTIVITIES OF SIDI AND ITS PARTNERS 17


Map
of SIDI’s financial partners* in 2008

* and Southern networks

18 2008-THE ACTIVITIES OF SIDI AND ITS PARTNERS


SIDI’S PORTFOLIO AT
31/12/08. IN THOU-
SANDS OF EURO VOLUME OF SUPPORT IN
(CAPITAL, LOANS, TIME SPENT By THE SIDI
AREA PARTNERS COUNTRy CATEGORy GUARANTEES) TEAM

Africa FEFISOL Africa FUND - ****


RESEAU MAIN Africa NETWORK - ****
EAFUND / SMEA FUND
ASIANA
Central Africa
BURKINA
FUND
MUSO
497.7
-
****
***
GOVERNANCE
FNGN BTEC BURKINA PO - ***
MOGTEDO BURKINA PO 22.9 *** AT JUNE 12, 2009
CAPAD BURUNDI MUSO - ***
COSPEC BURUNDI MIFC - **
PREFED - BURUNDI BURUNDI MUSO - *
ADI-KIVU DRC MUSO - *** BOARD OF DIRECTORS
CCRD DRC MUSO 17.4 ****
COODEFI DRC MIFC 10.5 *
FAEF DRC MIFC - *
PAIDEK DRC MIFC - * SCHMITZ Christian
CRG GUINEA MIFP 17.8 **** Chairman of the Board of
FPFD GUINEA PO - *
ADAPS MADAGASCAR PO 20.0 ****
Directors
ALAOTRA/SILAC MADAGASCAR PO 100.0 ****
SIPEM MADAGASCAR MIFP 541.9 **** GUENARD Geneviève
TITEM MADAGASCAR MUSO - *** Board Member
AOPP MALI PO - ***
BMS SA MALI UMBRELLA 152.5 **** RICARD Xavier
JEMENI ADER MALI MIFC 38.1 **
NIAKO MALI MIFC 45.7 *
Board Member
CAIXAS COMUNITARIAS MOZAMBIQUE MIFP - **
UGC-CPC MOZAMBIQUE MIFC - ***
KOKARI NIGER MIFC 178.7 ***
TAANADI COOPERATIVE
PREFED-RWANDA
NIGER
RWANDA
MIFP
MUSO
155.5
-
****
***
SUPERVISORY BOARD
ASACASE SENEGAL MIFC - ***
CGRH NIANING SENEGAL PO - **
CREC SENEGAL MIFC 141.2 **** AURENCHE Guy
ESCALES JAPPOO SENEGAL PAVRA 50.0 *
JAPPOO INVESTISSEMENT SENEGAL PAVRA 236.3 **** Chairman
MEC PROPEM SENEGAL MIFC 160.1 *
UGIE SAPCA / EGAS SENEGAL PO - * MESNY Philippe
UGPM SENEGAL PO 96.6 **** Vice-chairman
TEMBEKA SOUTH AFRICA UMBRELLA 380.9 ****
AKIBA TANZANIA MIFP 419.6 *** CAISSE DES DEPOTS ET
FECECAV TOGO MIFC 76.2 **
MICROFUND TOGO MIFC - ** CONSIGNATIONS
TIMPAC TOGO MIFC 57.2 *** Represented by CHABRILLAT
UCMECS TOGO MIFC 61.0 ***
WAGES TOGO MIFP - **
Pascale
CERUDEB UGANDA MIFP 475.4 *
OMIPA UGANDA MIFC - ****
COMITE CATHOLIQUE CONTRE LA
Latin America FOROLACFR Latin America NETWORK - ** FAIM ET POUR LE
RCF - FOPEPRO Andean Countries FUND - ****
ANED BOLIVIA MIFC 155.2 **
DEVELOPPEMENT
DOSBRAZOS BOLIVIA UMBRELLA - ** Represented by LESAy
INDES CHILE MIFP 85.1 * Martial
CONSOLIDAR COLOMBIA MIFC 78.8 *
BANCOSOLIDARIO
CORECAFE
ECUADOR
ECUADOR
MIFP
PAVRA
165.4
22.2
*
*
CONGREGATION DES SŒURS
FAPECAFES ECUADOR PO 140.9 ** AUXILIATRICES
MCCH ECUADOR PAVRA 190.6 ** Represented by
RED FASCO GUATEMALA UMBRELLA 193.3 ***
FONDEFER/FENACOOP NICARAGUA PO 140.1 *** Sister Marie-Thérèse GAUD
CAFEPERU PERU PAVRA 165.3 ***
CONFIANZA PERU MIFP 142.0 ** CONGREGATION DES URSULINES
CREDIFLORIDA PERU MIFP 67.9 *** DE JESUS
EDAPROSPO PERU MIFC - **
FORTALECER PERU UMBRELLA 180.0 **
Represented by
LA FLORIDA PERU PO - **** Sister Christiane GROSSIN
SAINDESUR URUGUAy MIFC 108.7 *
Asia MAF- ASIA Asia FUND 156.7 * CREDIT COOPERATIF
AMRET CAMBODIA MIFP 389.8 *
HATTHA KAKSEKAR CAMBODIA MIFP 238.1 ****
Represented by
FONDS COOPERATIF LAOS MIFC 187.6 **** MORET Laurence
LAO FARMERS PRODUCTS LAOS PAVRA 83.7 **
Mediterranean EPARGNE SOLIDARITE
Basin ANJCE ALGERIA MIFC - ***
EACD EGyPT MIFC 264.4 ***
DEVELOPPEMENT
FAIR TRADE LEBANON LEBANON PAVRA 60.0 *** Represented by
NAJDEH LEBANON MIFC 28.1 ** DEQUEKER Guy
AL AMANA MOROCCO MIFP 245.6 ****
AMSSF MOROCCO MIFC - ***
ACAD PALESTINE MIFC 101.3 ****
BITSCH Gérard
ASALA PALESTINE MIFC 33.0 ** Member
CD-HOUSING PALESTINE MIFC - *
Fonds de garantie Palestine PALESTINE FUND 166.0 ****
Caribbean FONHSUD HAITI MUSO 42.9 **
KNFP / IMOFOR HAITI NETWORK - ****
Europe S.E.F.E.A. Europe FUND 135.0 *
KRK KOSOVO MIFP 1248.6 ****
MICROINVEST MOLDOVA MIFP 129.3 ***
TOTAL 9 298,7

The portfolio is invested as follows: 43.3% in equity capital, 50.4% in loans and 6.3% in guarantees.
2008-THE ACTIVITIES OF SIDI AND ITS PARTNERS 19
Printed on recycled paper - ✬ POUSSIÈRES D’ÉTOILES - 01 60 92 42 75 - Photo : ©SIDI
INTERNATIONAL SOLIDARITY FOR DEVELOPMENT AND INVESTMENT

12 rue Guy de la Brosse


75005 Paris
Phone: 33(1)40 46 70 00
Fax: 33(1) 46 34 81 18
www.sidi.fr

www.esf.asso.fr www.forolacfr.org

www.ccfd.asso.fr www.finansol.org www.inaise.org www.febea.org www.mfiain.org