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
first of all like to warmly thank all of those who
gave a positive response to the call launched in
October of last year to increase SIDI’s capital in
order to provide your “instrument” with the fi-
nancial resources required to continue to fulfil its
mandate as a social investor. After 25 years of
working at the service of solidarity financing, the
successful rights issue confirms the vitality of the
“solidarity chain for financing”, which is aimed at
those who are excluded from financial services
throughout the world.
The completion of the 2006-2008
strategic plan.
On 31 December 2008, SIDI completed the im-
plementation of its three year plan for the period
2006-2008, in which it established the priority of
targeting the rural world, particularly on the Afri-
can continent. All of the financing provided over
the course of this period has been directed at the
rural areas: today, 63% of SIDI’s loans are provi-
ded in those areas. Furthermore, the work carried
out in the rural areas led to the definition of a
more “inclusive” approach known as the “Pro-
motion of Added Value in Rural Areas - PAVRA.”
Moreover,, the work carried out over a three year
period to seek “social and developmental viabi-
lity” in our actions and those of our partners
confirmed SIDI’s “Social Added value”.
Thanks to the choices made by its shareholders,
SIDI is able to go a long way in terms of sharing
risks with its partners. An analysis of the portfolio
shows that the solidarity investment work carried
out does, indeed, bear fruit in the long run. Seve-
ral investments made some ten years ago in coun-
tries that were experiencing difficulties at that
time, but which benefited from regular and conti-
nuous support, are now showing prospects of a
return on investment and this encourages SIDI to
open up new fronts for solidarity financing in dif-
ficult contexts (Palestine, Haiti...).
SIDI is therefore striving to strike the right balance
between the level of return on its investments and
the institutional, financial and social consolidation in order to provide an effective response to the
of its partners. sector’s needs (thanks to the leverage generated
through the mobilisation of public funds) and also
The 2009-2012 plan to share risks. New funds specifically designed to
address the needs of rural financing are currently
being created for Africa (FEFISOL) and Central
For the 2009-2012 period, SIDI has decided to America and the Andean countries (FOPEPRO).
pursue its goal of financing the rural world
through different categories of partners and tools, Finally, here are the main lines of ac-
in order to provide a range of services adapted to tion that will guide us until 2012:
meet demand and to optimise the resources and
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
favouring the access of people living in the rural • Guarantee, support and communicate on the
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
• Networks of MUSO (solidarity credit unions). The • Guarantee SIDI’s equilibrium and social and fi-
MUSO are not only effective savings and finan- nancial continuity
cing instruments, but also provide a platform for Thanks to our recent rights issue, the amount of
exchanges and mutual aid. They are also condu- loans planned between now and 2012 reaches
cive to the creation of dynamics that drive local €14 million. The leverage effect that is expected
development and social change. to be generated through the regional financing
• MFI that require consolidation: this type of part- mechanisms should enable us to achieve a port-
ner is at the very heart of SIDI’s core activities. MFI folio of €60 million.
are institutions that require support at both the fi-
nancial and institutional levels. They often have I would now like to invite you to discover the ac-
greater technical assistance needs and require a tions undertaken and the values promoted with
particularly demanding and patient form of sup- them as you read this 2008 activity report.
port.
• MFI that have a great level of potential and have
already been SIDI partners for several years. SIDI
continues to be attentive to their investment re-
quirements with a view to establishing comple-
mentarities between the social partners and as
part of the on-going efforts to maintain a balance
between SIDI’s financial and social viability.
• National or sub-regional institutions that refi-
nance the Local Financial Services (LFS). Since SIDI
only has limited resources, it seems appropriate to
concentrate its interventions through “secondary
level” - umbrella - instruments and to search ad-
ditional financial resources from public and pri-
vate donors, in order to create a leverage effect.
• Continental funds: SIDI has embarked on an in- Christian Schmitz
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-
nance has shown that, despite its li-
mitations, it is an effective development
tool, notably because it serves to re-
duce the “vulnerability” of its benefi-
ciaries when confronted with the
unexpected. SIDI takes part in this pro-
cess in an original way by supporting
a network of partners who provide fi-
nancial services to the local populations
who are excluded from the traditional
banking circuits.
A freezer in Senegal, powered by solar panels
provided by the UGPM’s programme
A brief guide to SIDI.
SIDI, International Solidarity for Development
and Investment, is a limited liability solidarity
company created in 1983 by the development
NGO CCFD -Terre Solidaire (the Catholic Com-
mittee against Hunger and for Development).
SIDI promotes a social and solidarity economy
by locally consolidating individual and collective
economic activities in the countries of the South
and the East.
Its activity consists of financial and technical sup-
port to Local Financial Services (LFS), which pro-
vide financial services tailored to groups
excluded from traditional banking circuits. The
goal is to promote the consolidation of these
structures so that they can offer sustainable ser-
vices such as savings, loans, training, market ac-
cess and risk-pooling.
4 2008-THE ACTIVITIES OF SIDI AND ITS PARTNERS
Solidarity financing in
2008
In 2008, the microfinance sector was mar-
ked by two phenomena that were some-
times contradictory. On the one hand, the
appearance of new actors (commercial
banks, specialised investment funds, inter-
net-based direct collection systems) has at-
tracted more capital to the sector, often
designed, above all, to be financially profi-
table. On the other hand, the financial, fol-
lowed by the economic, crisis has
aggravated the difficulties encountered by
many LFS. Not only have they seen an in-
crease in the number of late repayments
by their clients, but they have also expe-
rienced greater difficulties in financing
themselves.
It is in this difficult context that SIDI, with
the support of the Solidarity Chain for Fi-
nancing (fig. 1), has continued its activities,
SIDI supports its partners via two complemen-
tary means:
• By increasing their financial resources, in the
form of equity financing, loans, guarantees and
searches for additional resources from interna-
tional institutions.
• By offering tailored technical support to im-
prove governance, strategy, management, trai-
ning, diversification, networking, etc.
SIDI’s capital of 9 million euros, which was raised
to 13 million euros in April 2009, is invested in
62 partners in 28 countries and its consultancy
budget amounted to 1.76 million euros in 2008.
Its activities, led by a team of 11 geographical
desk officers, assisted by 15 volunteer experts,
strive to make sustainable improvements in the
well being of the populations.
maintaining its focus on the rural world
and Africa.
A portfolio of €9.3 million invested in 62
partners in 28 countries
During the course of 2008, SIDI has provi-
ded financial support for 62 partners for a
total of €9.3 million. This significant in-
crease (+24% compared to 2007) has
been coupled with several important mo-
vements, with €2 million of disinvestments
and the commitment of a further €3.8 mil-
lion.
Six new partnerships were established du-
ring the year: ADAPS in Madagascar, ES-
CALES JAPPOO in Senegal, FECECAV in
Togo, CORECAFE in Ecuador, CAFEPERU in
Peru and FAIR TRADE LEBANON in Leba-
non. These partnerships represent only
10% of SIDI’s investments over the course
SIDI is active in solidarity financing, mobilising
individuals and institutions in the North who
choose to give SIDI the financial means to carry
through its actions and who give priority to
human, social and environmental benefits. As a
result:
• SIDI’s shareholders share the risk taken on by
the institutions in the South, without any expec-
tation of financial dividends;
• Savers from the “Hunger and Development”
mutual investment fund share the proceeds from
their savings in order to defray a portion of SIDI’s
technical support.
For 25 years, this Solidarity Chain for Financing
has enabled SIDI to conduct sustainable actions
with its partners and to promote their own in-
dependence.
of the year – since the majority of the fi-
nancing provided in 2008 was designed to
bolster the means of its long-standing
partners. The average amount of invest-
ment per partner rose to €150,000 (com-
pared to €134,000 in 2007).
Disinvestments in line with forecasts
The disinvestment figure of €2 million refers
to the repayment of maturing loans (81%)
and the withdrawal of guarantees (10%).
The remaining 9% represents the sale of
equity shares taken in the LA-CIF fund in
Latin America, which closed at its maturity
date and the AMRET fund in Cambodia,
from which SIDI withdrew to the benefit of
new social investors whose means are in
keeping with the needs of the rapidly ex-
panding institution.
A dual priority confirmed in Africa and in
the rural world
All of the new partners accord priority in
their work to the rural world and the majo-
rity of the investments provided over the
course of the year were targeted at rural fi-
nancing. By the end of the financial year,
support for the rural world represents 63%
of the total portfolio. .
DIF
Capital
vestment fund and CCFD
€ 9 million
Refinancing fund
LFS PO LFS
Figure 2. Geographical breakdown of the portfolio in 2008
Eastern Europe 16%
Mediterranean Basin 10%
Asia 11%
Latin America 20%
Furthermore, Africa continues to be a main
focus of SIDI’s attention, since the amount
of its portfolio dedicated to this continent
remains stable at 43% (fig. 2).
Risk-taking in accordance with the sha-
reholders’ objectives
As of 31 December 2008, 56% of SIDI’s
portfolio was committed in local currency,
down from the previous year’s figure of
66%. This is explained by the number of in-
vestments made in the countries that use
the dollar as their currency of reference,
such as those in Latin America.
Furthermore, investment in the capital of an
LFS continues to represent SIDI’s favoured
form of intervention tool, due to its long-
term and solidarity-based nature and such
interventions have remained stable and
constitute 43% of the portfolio.
SIDI is always present in the areas that are
considered to be “at risk” (Palestine, the
African Great Lakes Region) and in 2008 it
has strengthened its presence in Lebanon
and Madagascar and has renewed its in-
vestments in Haiti.
Finally, SIDI strives to invest in structures
that develop financial services for their
members, even though they are not MFI:
30 of its partners are associations, produ-
Figure 1. The Solidarity Chain for Financing
Revenue from joint in-
€ 1.1 million/year
Mobilisation of funds
Technical Assistance fund from alliances
LFS PO LFS
Africa 43%
cers’ organisations and rural enterprises.
Half of SIDI’s portfolio is invested in MFI that
have a great deal of potential (fig. 3)
Solidarity support in 2008
SIDI is currently supporting 85 part-
ners in 32 countries (62 of which
have benefited from financial sup-
port).
A multiple and adapted form of support
The aim of the support provided by SIDI is to
ensure the sustainability of the actions un-
dertaken by the LFS so as to bring about a
long-term improvement in the situation
faced by their beneficiaries.
In 2008, this support focused on 5 main
areas:
• the internal organisation of the LFS: ac-
counting, information systems, human re-
sources;
• governance, strategy, creation of new pro-
ducts;
• analysis and monitoring of their portfolio;
• reflection upon their Social Added Value;
LFS : Local financial services
PO: Producers’ organisations
DIF: Development Incentive Fund
2008-THE ACTIVITIES OF SIDI AND ITS PARTNERS 5
• negotiation of complementary resources
from third party entities (banks, NGO, public
agencies…).
This support is provided by SIDI’s team of 11
geographical desk officers who, in turn, are
assisted by volunteers, all of whom are reti-
red professionals in the banking, finance or
enterprise sector. In 2008, the support pro-
vided by volunteers represented almost one
quarter of the 2,181 days dedicated by SIDI
to the provision of support/advice to the
partner LSF (with a further 1,142 working
days dedicated to the identification of new
partners and horizontal issues)
In 2008, these support and accompanying
measures represented an average of 23
days per partner, mostly taking the form of
on the ground support missions.
A budget of €1.76 million was required to
fund these support measures (or 73% of
SIDI’s operating costs, with the remaining
27% being dedicated to “head office” ex-
penditure), up 9.5% on the corresponding
figure for 2007. This increase is due, in part,
to the considerable amount of preparatory
work carried out prior to the creation of two
investment funds, namely the Fund for Latin
America (FOPEPRO) and the Fund for Africa
(FEFISOL), as well as the follow up work re-
Figure 3: Breakdown of the portfolio per category in 2008
FUNDS 10%
PO 6%
PAVRA 9%
Umbrella 10%
MFIC 19%
6 2008-THE ACTIVITIES OF SIDI AND ITS PARTNERS
quired on the third and final year of the Eu-
ropean Union’s co-financing (EU/ACP).
Finally, in accordance with the objectives of
the strategic plan, 66% of the time spent to
provide support and advice has been dedi-
cated to SIDI’s African partners (fig. 4). Fur-
thermore, 18% of the time has been spent
with partners engaged in a process of
consolidation and 28% with rural structures
(producer organisations, rural enterprises,
solidarity credit unions).
Support financed by the “Solidarity
Chain”
The support provided to SIDI’s LSF partners,
which enables them to benefit from a cus-
tomised form of support in a wide range of
areas, is generally provided free of charge.
Indeed, SIDI’s economic ethos is founded
upon a “Solidarity Chain for Financing”,
which makes it possible to mobilise funds in
the North in order to support the partners
in the South and the East:
- First of all, the CCFD-Terre Solidaire fi-
nances SIDI’s action through the shared re-
venue generated by the “Faim &
Développement” (fig. 1) Joint Investment
Fund, which covers 48% of the costs (and,
MUSO 1%
MFIP 45%
Figure 4: Breakdown of support per region in 2008 (not including identification
of new partners and cross-cutting issues)
Eastern Europe 6%
Mediterranean Basin 13%
Asia 8%
Latin America 11%
more specifically, 66% of the costs related
to the provision of support and accompa-
nying measures).
- Furthermore, SIDI has negotiated
€534,000 in co-financing, 68% of which
comes from support provided by the Euro-
pean Union (UE/ACP). The African continent
has been the main beneficiary of this co-fi-
nancing (81%).
The remainder of SIDI’s income comes from
the revenue generated by its own activities:
- SIDI’s portfolio generated €563,000 in
2008, which represents a significant in-
crease on 2007 (+79%) thanks, notably, to
an increase in the dividends received as well
as the interest earned on loans.
- Finally, SIDI has benefitted from an ex-
ceptional income of €879,000, thanks to
the negotiated sale of a part of its invest-
ments. Rather than withdrawing from its
partners’ capital in order to generate an
added value, SIDI’s decision in that case was
motivated by the fact that the partner in
question is now autonomous and in the
process of becoming financially viable.
Umbrella: so-called secondary level institution
whose role is to support MFI
MFIC: Microfinance Institution engaged in a
process of consolidation
MFIP: Microfinance Institution with a high
potential
MUSO: Solidarity Credit Union
PO: Producers’ Organisation
PAVRA: Promotion of Added Value in Rural Areas
Caribbean 3%
Africa 66%
 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
and flexible support
SIDI strives to give individualised responses
to its partners’ expectations. It tailors its
services and its volume of support to re-
quests and to the type of partner. Further-
more, thanks to donations from the SCF,
SIDI is able to adapt its financial circums-
tances to local needs and contexts, contri-
buting technical assistance that is
appreciated, useful and seldom charged to
the partner.
Lastly, SIDI does not set prior limits on the
length of its partnerships, thereby enabling
it to appreciate the context in which it acts,
build relations of trust with its partners and
understand and promote its partners’ so-
cial added value vis-a-vis the beneficiaries.
In 2008, this support activity involved a
number of partners in difficulty. SIDI was
also able to boost its support to the ma-
nagement of the social dimension.
Adapting to partners’ difficulties
When an LFS is in financial straits owing
to difficulties in repaying loans, SIDI takes
the time to work on the causes in order to
Focus n° 1:
Ten years walking along with the
UGPM in Senegal
SIDI and the UGPM began their partnership
in 1995, initially to develop solidarity credit
unions in the area (90 villages and 10,000
inhabitants) and then to finance the instru-
ment created by these credit unions, namely
the CREC (Caisse Rurale d'Epargne et de
Credit – Regional Savings and Loans Fund),
which collects savings, grants loans and re-
finances the credit unions.
Since SIDI and the UGPM both believe fa-
mily-run farms (rural economic entities that
bring together parents and their offspring,
who have established their own family,
under the same roof) to be key economic
entities in the rural world, their next step
was to launch a specific financing pro-
8 2008-THE ACTIVITIES OF SIDI AND ITS PARTNERS
suggest sustainable solutions.
In application of that policy, SIDI expanded
its original offer for financial support to the
Fédération des Paysans du Fouta Djalon
(Guinea) by paying for certified potato
seeds for its members. SIDI was then reim-
bursed from the proceeds generated by the
sale of the crop. This arrangement enabled
the farmers to pursue their livelihood with
quality inputs at a reduced cost to the
cash-strapped Fédération grappling with a
highly inflationary context.
Another example concerns the Mogtedo
rice farmers’ co-op in Burkina-Faso that
was confronted with a sharp reduction in
the harvest caused by the drying up of a
retaining reservoir, which jeopardised its
ability to repay its loans. After conducting
an evaluation mission, SIDI agreed to re-
negotiate the loan, which meant that the
co-op could allocate and resume its loan
repayments.
Promoting management of the so-
cial dimension
SIDI maintains that it is essential for the
partner LFS to follow practices that are in
line with their social vision. They all aspire
gramme. The UGPM first of all closely as-
sesses the applicant families, enabling them
to put together a project meant to “get
them out of a hole” (usury and seasonal
shortfalls) by creating or increasing econo-
mic activities that correspond to their know-
how. Then, with the support of SIDI, the
UGPM finances the family-run farm, in ac-
cordance with the adopted plan.
So far 80 family-run farms have benefited
from the support of the UGPM, with mixed
results: in a difficult context (poor soil qua-
lity, lack of finance…) it is not easy to esta-
blish an appropriate structure for a family’s
economic activities (farming, livestock rea-
ring, small-scale commercial and craft acti-
vities, market gardening, seasonal
employment in the city).
However, one observation has emerged
quite clearly: in order to promote the goods
produced in the rural areas, one has got to
to benefit their customers above and
beyond a purely financial procedure. But
what social goals do they pursue and what
means do they have to achieve them?
To answer that question, SIDI set up in
2001 a Social and Development Viability
group that, along with voluntary partners,
prepared a methodology to ensure that the
LFS are able to do the following:
- clarify their social goals,
- set in motion the right guidance for
these goals over time.
The aim is to lead all these partners
through this procedure.
In 2008, along with the partners, several
initiatives were started or made progress.
Hereafter are some examples:
• With a local consultancy, SIPEM set up a
monitoring tool for customer vulnerabi-
lity, using criteria such as health, educa-
tion, level of schooling and family
savings.
• In Mali, BMS and SIDI organised at the
end of 2008 a workshop on social per-
formance in the microfinance sector; the
event was highly appreciated by the
many participants and led to concrete re-
sults (see focus 8).
process them (and therefore make joint in-
vestments); in order to obtain the right price,
one must avoid using itinerant traders. A
double strategy was therefore devised to
find new marketing circuits and to generate
solar energy. This energy provides power for
homes (mainly to help children in their stu-
dies), for irrigation pumps, and for freezers
(that make fish available at a lower cost).
This partnership between the farmers’ or-
ganisation and SIDI has enabled both struc-
tures to evolve. It is essential to speak
clearly and openly to one another and to
maintain the rigour and discipline that is re-
quired by solidarity financing. “Walking
along together” requires the establishment
of real human relationships, regardless of
the membership basis or situation of the
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
Cambodia (HKL)
When SIDI began to invest in AMRET in
Cambodia in 2000, it felt that a second part-
nership in the country would enable it to
work more efficiently and also to get a bet-
ter understanding of the national environ-
ment. SIDI therefore decided to both
finance and support HKL. Unlike the great
majority of the local MFI, at that time HKL
was not led by a foreign donor and was
working with a Khmer team. It also had
deeper roots in the local rural context. In-
deed, its very name, Hattha Kaksekar (“the
farmer’s hand” or the “farmer’s outstretched
hand”) only serves to emphasise its inten-
tions.
The following year, the authorities granted
HKL approval to become a formal MFI and
to be supervised by the central bank. At that
time, SIDI’s support took the form of active
participation in the drafting of the institu-
tion’s constitutive documents and its gover-
nance.
However, in 2002 the central bank decided
that, since there had been a significant de-
terioration in the loan portfolio, the rene-
wal of its approval would be subject to a
swift stabilization of HKL’s operations and in
increase in its capital. SIDI then chose to
provide enhanced technical assistance to
the Khmer management of the MFI.
A volunteer consultant (a former banker)
was heavily involved in this technical sup-
port, which took the form of 4 to 5 field vi-
sits per year, the establishment of an action
plan, the redefinition of key positions, taking
part in recruitment procedures, almost daily
monitoring of the development of the ope-
rations, the search for finance (loans and ca-
pital), as well as assuming chairmanship of
the Board – even though SIDI only held a
minority shareholding (19.5 %).
For its part, the HKL leadership team sho-
wed great loyalty to the institution, assumed
an increasing volume of work with great in-
telligence and energy and established a
trust-based relationship with SIDI. In 2000,
HKL’s portfolio was worth close to $1.2 mil-
lion, whereas at the end of 2008 this figure
was close to $30 million…
Today, HKL’s success is attracting many new
investors that have significant financial re-
sources. SIDI’s participation and role will be
reduced over the course of time. However,
this partnership validates the vision, mission
and ambition of the founders of SIDI with
regard to its role supporting local organisa-
tions in the developing countries, at the ser-
vice of micro- entrepreneurs.

2008-THE ACTIVITIES OF SIDI AND ITS PARTNERS 9

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

Focus n° 3: The need to strengthen

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

10 2008-THE ACTIVITIES OF SIDI AND ITS PARTNERS

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

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

Laos: traditional silk weaving
wants to assist it in creating a procedure
for analysing and selecting co-ops.
In Madagascar, the Association pour le Dé-
veloppement de l'Agriculture et du Pay-
sannat du Sambirano (ADAPS), created in
2001, works in the market gardening sec-
tor and with producers who grow vanilla,
coffee, cocoa and pepper. SIDI has had ties
to ADAPS since 2004. In 2008, SIDI gua-
ranteed a loan granted to ADAPS by a local
bank, a subsidiary of BNP Paribas, to en-
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-
RECAFE so they control the company’s vi-
sion and use it to enhance the value of
their production. CORECAFE is the first as-
sociation of its type in the country to suc-
ceed in placing its coffee on the shelves of
large supermarkets.
CORECAFE continues to expand with the
support of SIDI, which granted it a
$35,000 loan to help develop its produc-
tion. A project is underway to organise
roasting, grinding and bagging of coffee in
the co-ops and to transfer a maximum of
economic and social added value to the
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
ADIE International at the end of the Kosovo war. Today, KRK is the
leading rural microfinance institution in Kosovo and in 2008 it had
more than 17,000 members in its network of 37 village savings and
loans associations. Indeed, 75% of its loans are granted to the agri-
culture and livestock sector.
SIDI acquired part of KRK’s capital and took a seat on its board
when it became a limited company. In 2007-2008 it strongly sup-
ported KRK in its rights issue process, enabling the institution to ac-
cess the funds required for its growth with favorable conditions.
SIDI and ADIE International have been instrumental in renewing the
shareholding and have also deployed major efforts in order to main-
tain a balanced form of share ownership between the Kosovars
(FIEK, a federation of KRK’s 37 savings and loans associations, which
holds 26%) and the foreign shareholders.
The consolidation of its equity enabled KRK to borrow from new fi-
nance bodies. SIDI has made a major contribution to the search for
this finance. It has even granted a loan of €700,000 through the
“Faim et Développement” JIF, together with a bridge loan of
€300,000 from its own equity. Today, KRK is ready to carry on with
its activities with sustained growth and to respond to the substan-
tial ongoing demands of its rural clients.
SIDI has been appointed to replace ADIE International to chair the
board, thereby placing it in a good position to collaborate with the
other board members.

12 2008-THE ACTIVITIES OF SIDI AND ITS PARTNERS

ESCALES JAPPOO is a chain of restaurants
in Senegal that makes use of local farm
products in its kitchens and pays its em-
ployees a decent wage. The first two res-
taurants opened up in the tourist zone of
Saly and 25 direct jobs were created, in ad-
dition to secondary jobs of musicians,
crafts people, etc.
Despite some hitches, such as electric
power problems, competition and a fall in
tourism, the restaurants have managed to
offer quality cuisine and service. Most of
the employees are their families’ bread-
winners, which has improved the lives of
hundreds of people. Many locals, such as
vegetable farmers and fishermen, have
sold their production at higher prices to the
restaurants than those offered by itinerant
merchants.
The example of ESCALES JAPPOO shows
that it is possible to create companies in
Africa for the benefit of rural people and
youth. However, it requires sizeable invest-
ment in time and money.
Promoting solidarity credit unions
Solidarity credit unions are a unique orga- (DRC), more than $1 million in savings has
nisation, invented by Senegal farmers in been built up and been put to work in eco-
1995 and later disseminated by SIDI to nomic activities by the members of 600 so-
other countries. They are self-help groups lidarity credit unions, who then became
whose members make equal contributions 80% owners of their own savings and loan
to set up a people’s self-managed savings institution.
and financing tool. They also help to struc-
ture and give cohesion to the sector, in the
sense that they enable the group to ex-
change views on their activities and pro-
blems and to launch joint projects in areas
such as healthcare, collective investment,
seed purchases, etc. It is also a self-help
group, for example its emergency fund can
improve access to healthcare.
SIDI works in training, information techno-
logy, strategy and financing with around a
dozen organisations that promote solida-
rity credit unions, particularly in far-flung
rural areas.
At the end of 2008, these promoters (far-
mers’ organisations, development NGOs
and religious orders), were working with
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-
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
In 2005, SIDI, MAIN, the African network and Alterfin/Belgium ob-
tained a grant of €790,000 from the European Union for a period
of three years, in order to develop financial services in underserved
rural areas in 12 African countries and Haiti, and to increase trans-
parency in the sector. The main focus of the project was:
• to support the diversification of the financial products made avai-
lable to the beneficiaries
• to strengthen governance within the institutions through techni-
cal assistance and training missions
• the development of solidarity credit unions in rural areas.
Completed in 2008, the project is now at the capitalisation stage,
but it is already possible to say that it has led to a considerable in-
crease in support for the beneficiary institutions. Indeed, we can
draw the following conclusions in particular:
• an extra 120,000 beneficiaries in rural areas have been accoun-
ted for in the 10 institutions supported by the project between De-
cember 2005 and December 2008 (an increase of 70%), even
though this increase is not solely due to the support provided by
the EU project;
• following the studies and support missions, 13 new products have
been created, notably at OMIPA/Uganda and JEMENI/Mali. Fur-
thermore, savings systems have been introduced within several part-
ners;
• the project has financed more than 60 support and training mis-
sions (in the areas of governance, social performance, computer li-
teracy, portfolio...) ;
• Finally, more than 720 board members and managers have re-
ceived training thanks to the workshops and training sessions held
by the MAIN and the KNFP/Haiti on social performance and the
MUSO system.

2008-THE ACTIVITIES OF SIDI AND ITS PARTNERS 13

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

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

14 2008-THE ACTIVITIES OF SIDI AND ITS PARTNERS

shareholder, SIDI was also mindful of how
the capital increases played out in SIPEM,
HKL (focus 6) and Microinvest and, finally,
took part in the transformation of CCRD into
a limited liability company.
Moreover, SIDI makes sure that its partners’
decision-making bodies are in a position to
get the tools necessary to monitor activities
and to acquire the skills needed for the ef-
fective management of their structure. SIDI
organises training sessions for board mem-
bers on the preparation and holding of board
meeting and on how to monitor the appli-
cation of decisions.
In 2008, SIDI did some positive work to in-
troduce tools for monitoring and managing
activities in the Great Lakes Region, and hel-
ped TAANADI, UCMECS and TIMPAC to ob-
tain a cash monitoring tool. SIDI also
participated in the strategic planning of Tem-
beka, AMSSF, Asiena, Fortalecer and CAC la
Florida. In addition, it pursued the deploy-
ment of software for monitoring solidarity
credit unions. Finally, training for boards of
directors was provided thanks to financing
from the European Union (focus 6): SIDI trai-
ned directors from CRG, Timpac, Taanadi, Ko-
kari and Omipa.
Focus n°8: Creating leverage in Mali
In 2004, SIDI decided to invest in the Banque
Malienne de Solidarité (BMS-SA), the only fi-
nancial institution of its kind throughout the
whole of Western Africa. SIDI has a seat on its
Board and provides a steady technical banking
assistance (the costs of which are borne by the
BMS).
The mission of the BMS, created in 2002, is to
favour the financing of SME/SMI through MFI
and also to directly finance small producers
who are not able to access bank credit. The
fact that most of the capital is held by MFI re-
flects the intention to make the BMS become
a financial instrument supporting microfinance.
By the end of 2008, having existed for five and
a half years, BMS had 10 agencies spread
across the country and more than 20,000 ac-
5. Sources of support
In its capacity as a social development
player SIDI seeks to mobilise those around it
with the goal of promoting its vision of so-
lidarity financing and to secure additional
resources for its partners. Although its own
solidarity resources are stable, they are not
enough to meet the needs conveyed by its
partners. Furthermore, at a time when com-
mercial microfinance activities are growing
apace, SIDI is reaffirming the need to back
local, in particular rural, development
players who, despite their social usefulness
and potential, are not yet profitable.
Consolidating the Solidarity Chain
for Financing
The year 2008 was marked by three major
events:
• First, CCFD-Terre Solidaire and the Crédit
Coopératif launched a new shared investment
fund designed to finance SIDI’s activities, cal-
led Faim et Développement Agir CCFD. It is
available at all French banks under the ISIN
code FR0010627232.
• Next, in order to fund its development in
the next four years, SIDI launched in Octo-
ber a 4-million euro capital increase. Des-
pite the financial crisis, or perhaps thanks
to it, new and old shareholders alike mo-
counts, with a loan portfolio of €50 million and
deposits of €72 million. It also had a net in-
come (not including subsidies) of €2 million.
The BMS works with more that 40 MFI that
operate in both rural and urban areas. All of
the requests for credit from viable structures
have been satisfied, with an annual average
of €11 million in outstanding loans. The BMS
also carries out its actions through associa-
tions, cooperatives and other groupings in
order to reach out to the largest possible num-
ber of low-income Malians; accordingly, al-
most 200 associations benefited from loans
between 2003 and 2008.
Today, MFI are major financial actors in the fi-
nance sector in terms of resources mobilised,
credits distributed and number of people co-
vered. From this point of view, their social and
financial performances have a direct impact on
bilised in significant numbers.
• Lastly, SIDI took the opportunity of its 25th
anniversary to invite 25 partners from the
South and East to an event in October 2008,
during which everyone increased their awa-
reness of SIDI’s solidarity financing and pre-
sented their activities to the CCFD/SIDI
audience, to the public at large and to jour-
nalists. The many partners who attended of-
fered the chance to set up a series of working
meetings on a range of themes, such as fi-
nancing, agriculture, meetings with alliances,
etc., and headway was made in many issues.
This gathering of Northern and Southern par-
ticipants was highly beneficial for the share-
holders, savers, the SIDI team and its partners.
It also served to strengthen shared convic-
tions.
Investing in refinancing tools
SIDI has established a financial and technical
relationship with nearly 70 partners. Most of
their needs are increasing, however SIDI on
its own does not have the means to keep
pace. SIDI therefore introduced an interven-
tion strategy via regional funds. This type of
instrument offers a better response to the sec-
tor’s financial needs, thanks to the leverage
effect achieved by the mobilisation of donor
agencies, and serves to pool and share risks
more efficiently.
the banking sector in general and the BMS in
particular. It is for this very reason that, in De-
cember 2008, the BMS both hosted and sup-
ported the organisation of a national
workshop on the social performance of MFI,
which was conducted by SIDI and was aimed
at the whole sector. This meeting led to the
creation of a permanent support function for
these performances, located within the Malian
Professional MFI Association.
This type of collaboration between SIDI and a
national level partner, which in turn maintains
relations with many local institutions, serves to
generate institutional, financial and social le-
verage.
2008-THE ACTIVITIES OF SIDI AND ITS PARTNERS 15
Two new funds, targeting rural financing, are
in the process of being created by SIDI and its
alliances, one for Central America and the An-
dean countries, under the name of FOPEPRO
(see focus 7), and the other under the name
of FEFISOL, devoted to Africa and more spe-
cifically rural areas, combining financial and
technical support. Their technical arrange-
ments, strategy and tools were established in
2008.
Investing in second-tier structures
TEMBEKA in South Africa, REDFASCO in Gua-
temala, BMS in Mali, SMEA in Uganda and
FORTALECER in Peru.
Sometimes, in countries where financial ser-
vices are plentiful, SIDI believes it is useful to
concentrate its actions on second-tier struc-
tures (Umbrella institutions) and in that way
optimise its contribution via a leverage ef-
fect.
For SIDI, these are strategic instruments that
make it possible for the MFIs to refinance.
They also encourage reflection on microfi-
nance, thereby generating greater know-
ledge of the sector and facilitating the
application of studies on the financial, so-
cial and institutional performance of the LFS
(see focus 8).
Since the end of 2007, SIDI has held 10% of
the shares of Stromme Microfinance East
African (SMEA), a regional refinancing fund
for MFIs in Uganda, Kenya, Tanzania and
Sudan, created by the Stromme Foundation
of Norway. This fund is managed in Uganda
by local staff. SIDI also provided a $500,000
bridge loan to SMEA in 2008 and took part
in governance as a member of the commit-
tee that grants loans.
Furthermore, SIDI began in 2008 to transfer
its investments in Peruvian MFI to Fortalecer,
Figure 6 : Geographical breakdown of financial resources
mobilised from alliances in 2008
CEECS 11%
ASIA 23%
16 2008-THE ACTIVITIES OF SIDI AND ITS PARTNERS
an Umbrella institution set up by rural mi-
crofinance associations in the country. As a
result, the loan granted to Edaprospo was
fully converted into Fortalecer equity capi-
tal.
Networking and alliances
Several years ago SIDI took steps to mobilise
additional resources:
• from its alliances and structures in the
North that share its development vision, the
primary one being CCFD-Terre Solidaire;
• from public financiers and social investors.
In addition, SIDI is involved in several net-
works where it shares its practices, meets
other like-minded players and develops joint
projects.
For several years now, SIDI and CCFD-Terre
Solidaire have been making an effort to
work together in the field, a move that was
formalised in 2008. Both structures support
groups working for social change and share
the same vision of a solidarity economy. The
aim is therefore to capitalise on their com-
mon experience in development and solida-
rity financing, as well as to work together in
the field.
Eight partnerships are already benefiting
from the joint support of SIDI and CCFD: the
solidarity credit unions in the Great Lakes
region, the Fonds Coopératif in Laos, the
MAIN network, Fonhsud and KNFP in Haiti,
FENACOOP/FONDEFER in Nicaragua, CAC
la Florida in Peru and TITEM in Madagascar.
Furthermore, SIDI mobilised in 2008 nearly
400 million euros for the direct financing of
its partners (fig. 6) via its alliances with (in
addition to CCFD) Cordaid in South Africa,
the Caixa Catalunya Foundation for Peru
and Andean producers, as well as the North-
South investment fund that has granted
THE CARIBBEAN 1% AFRICA/MAIN 8%
AFRICA 17%
LATIN AMERICA 40%
large loans in Cambodia, Eastern Europe,
Peru and Ecuador.
SIDI also mobilised 534,000 euros in co-fi-
nancing for the MAIN network (CCFD, Fon-
dation GILLES/Belgium), for the structure of
the FOPEPRO Fund in the Andean countries
(the Ford Foundation in the USA, FUSM in
Spain and CORDAID in the Netherlands),
the Fonds Coopératif in Laos (MISEREOR in
Germany and MAE in France) and the Great
Lakes region and Senegal (CCFD).
Lastly, SIDI is pursuing its work with the net-
works. In 2008, it did the following:
• Continued its commitment to the Euro-
pean Federation of Ethical and Alternative
Banks (FEBEA) in order to pursue its projects
in the South.
• Actively took part in the board of INAISE,
a worldwide network of groups involved in
the social and solidarity economy and, more
importantly, took part in its first World Soli-
darity Finance Summit that brought toge-
ther 150 delegates from 42 countries.
• Participated actively in the work of the FO-
ROLACFR network in Latin America, which
brings together 370 MFIs and works to im-
prove financial services in rural areas.
• Maintained its commitment to MAIN (Mi-
crofinance African Institutions Network), a
network of 90 African MFI that exchange
experiences, organise training schemes and
conduct studies. This commitment was given
shape by financing (cash advances and
loans) and technical assistance (accoun-
tancy, workshops on social performance
and searches for finances). SIDI took part in
the preparation and guidance of an impor-
tant MAIN seminar in Uganda, with 120
participants from throughout the continent
who exchanged practices on microfinance
in Africa.
 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
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INTERNATIONAL SOLIDARITY FOR DEVELOPMENT AND INVESTMENT

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

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