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20 09 The actio

an d it s

INTERNATIONAL
p a
vities
f sidi
rtners

SOLIDARITY
FOR DEVELOPMENT
AND INVESTMENT
Table of Contents
2
A brief guide to SIDI
2
Glossary
4
Review of the work carried out in 2009
Solidarity financing in 2009
A portfolio of 9.4 million euro
invested in 65 partners in 29 countries
Investment in line with goals

Solidarity support in 2009


Support that solves partners’ problems

A brief guide to SIDI The Solidarity Chain for Financing provides double support

Sharing the risks


adequately and patiently 6

SIDI, International Solidarity for Development and Investment, is a Investing in partners’ equity
Lending in local currency
social investor that falls under the category of solidarity company. It was Activities in crisis zones
created in 1983 by a development NGO, CCFD -Terre Solidaire. SIDI pro-
motes a social and solidarity economy via the development of individual Providing accessible
8
and flexible support
and collective economic activities, which are initiated locally, in the coun- Promoting social dimension follow-up
tries of the South. Getting involved in institutions’ development

Its activity consists of giving financial and technical support to its partners, Adapting the range of services
10
to the local context
the Local Financing Services (LFS), which provide financial services tai- SSupporting producers’ organisations
lored to groups excluded from traditional banking circuits. SIDI also sup- Promoting value-added in rural areas
ports initiatives designed to increase the income of small rural producers. Promoting solidarity credit unions
Meeting training needs
SIDI’s goal is to promote the development of these structures in order to
guarantee the sustainability of services, such as savings, loans, training, Creating support mechanisms 12

market access and the sharing of risk, that SIDI provides to their benefi- Investing in refinancing instruments
Networking and collaborating with other alliances
ciaries and to contribute to development.
Ensuring the partners’ institutional viability
14
SIDI backs its partners via two additional means: and social purpose
Taking part in the process of institutionalisation
• By offering tailored technical support to overcome problems relating
Reinforcing governance
to governance, strategy, management, training, diversification, net-
working, etc. 16
Financial Statements
• By increasing their financial resources, in the form of equity financing,
loans, guarantees and searches for additional resources from interna- 18
Maps and List of partnerships
tional institutions.

In 2009, SIDI’s capital was invested in 65 partners in 29 countries; its ACP: Africa, Caribbean, Pacific
support and consultancy budget for partners amounted to 1.48 million CEECs: Central and Eastern European Countries
Glossary

euros. ES D: Epargne Solidarité Développement, grouping of S IDI’s


individual shareholders
Its activities, managed by a team of 11 desk officers, assisted by 15 vo- EU: European Union
lunteer experts, are intended to generate social value-added in order to JIF: Joint investment Fund
LFS: Local Financial Services
further the wellbeing of populations in a sustainable way. MFI: Microfinance Institution
MFIC: Microfinance Institution engaged in a process of consolidation
MFIP: Microfinance Institution with a high potential
Leverage effect: When each SIDI financial contribution is
SIDI is active in solidarity financing as well as mobilising individuals accompanied by financial contributions from other public or private
sources.
and institutions in the North who choose to give SIDI the financial MUSO: Solidarity Credit Union
means to carry through its actions without setting as a priority a finan- PO: Producers' Organisation
cial return but rather a human, social and environmental return. There- PAVRA: Promotion of Added Value in Rural Areas
PARMEC: Programme supporting the regulation of Solidarity Credit
fore, SIDI’s shareholders take a share of the risk borne by the Unions
institutions in the South in order to offer access to high-quality financial SCF: Solidarity Chain for Financing
SMEs: Small and Medium-sized Enterprises
services. Furthermore, savers in the Faim et Développement mutual in- TA: Technical Assistance
vestment fund share their proceeds to enable SIDI to provide locals Umbrella: so-called secondary level institution whose role is to
support MFI
with accessible technical support.
This Solidarity Chain for Financing enables SIDI to take sustainable ac-
INTERNATIONAL
tion with its partners without the fear of innovation-related risks, so as to SOLIDARITY FOR
promote their self-sufficiency.  DEVELOPMENT AND
INVESTMENT
www.sidi.fr
2  The activities of sidi and its partners in 2009
Message from the Chairman
Dear friends and solidarity shareholders,

W
e We had just finished our activities for 2009
when a violent earthquake struck Haiti. A joint
CCFD/SIDI mission conveyed our solidarity to our
partners and we put together an action plan for the
resumption of economic activities as a priority in
rural areas and the restoration of hope to as
many families as possible thanks to a
continuation of their income-generating activities. In light of the damage caused
by the earthquake in both the cities and the countryside, a portion of the Hai-
tian population sought refuge in their home towns and villages. A large-
scale urban exodus ensued, along with an impact on the fragile balance
Social Responsibility in the rural areas in terms of food security. Huge challenges are requi-
Report ring urgent and efficient action in areas such as housing, displaced
persons, agricultural policies and decentralisation. CCFD and SIDI
decided to boost the activities of our common partner Konsèy Na-
RISK
syonal Finansman Popilé (KNFP) by enabling it to launch a Rural
Solidarity Credit Investment Fund to help finance Haitians in rural
areas.

Throughout 2009, SIDI pursued its mission with some one hun-
GOVERNANCE SUPPORT dred partners in 30 countries by setting in motion its priorities
established for the 2009-2012 period, i.e. to contribute to sus-
tainable improvements in the income of rural producers by gua-
ranteeing real social added-value and by ensuring financial and
social sustainability of our actions and those of our partners.

LEVERAGE ADAPTATION RANGE To that end, we mobilised additional financial resources by


EFFECT OF SERVICES means of capital increases, negotiations for cofinancing, new al-
liances and a strengthening of our technical assistance des-
igned to sustain the actions of our partners. We have pursued
SIDI generates its social value-added from the our goals by trying to demonstrate that it is possible to manage
activities it carries out as a social investor through an economy in alternative ways that provide solidarity. All the ac-
the Solidarity Chain for Financing. This value-added tions carried out are part of a development perspective, based on
encompasses the following five dimensions: risk, a fundamental conviction that the dynamic of dignity is a driving
support, tailored services, the leverage effect and force of action because it enables the most destitute to gain access
governance. In the following pages, the social to essential financial services and to live from their productive activi-
responsibility report seeks to elucidate these ties within timescales that meet their needs by influencing, where ne-
dimensions. cessary, the commercial, economic and political mechanisms at local and
international levels.

All these actions encourage everyone – partners, SIDI’s team, the shareholders
and associated organisations – to expand their role in local issues as agents for so-
cial change, both here and there in order to build a better world. That is the aim of the So-
lidarity Chain for Financing, of which you are part.

In order to enable you to accompany us on this path, we have organised this 2009 report around
five Added-Value dimensions that SIDI generates through its activities as a social investor by sha-
ring risks, providing tailored technical assistance and offering the best services adapted to the local
context at the same time that we seek to enhance the leverage effect, for which we create spe-
cific mechanisms, and commit ourselves to institutional viability and to the preservation of our
partners’ social goals.

I therefore urge you to read this 2009 annual report, discover the actions we have carried out and
learn about the values we promote.

Christian Schmitz
Chairman of Sidi

The activities of sidi and its partners in 2009  3


22
Review of the work
carried out in 2009
As a result of the financial crisis that started in 2008, growth structures (LFS) often increased. Nevertheless, SIDI reasserted the
throughout the world slowed sharply in 2009; in Africa growth relevance of North-South financial solidarity and pursued its work
was only one-fifth of that recorded in previous periods. The with its partners – MFIs, socially responsible companies and
situation was particularly onerous in the poorest of the producers’ organisations – in order to take up the challenge of
developing countries. The crisis, accompanied by high food prices, finding financial services that are tailored to the needs of their
had a negative impact on MFI customers who encounter ever members or customers and to today’s difficult economic and
greater difficulties in repaying their loans and some are struggling social context.
with excessive debt. The portfolio risk of local financing

Solidarity financing Investment in line with goals


in 2009 Of all the 24 partners who received financial support in
2009, 20 operate in rural areas. At the end of the ac-
Under its strategic plan, SIDI devoted the bulk of its counting period, support for rural areas made up 62% of
Figure 1 - Destination by investment to structures operating in rural areas, the portfolio, in accordance with SIDI’s goals (agriculture
region of the portfolio mainly in Africa. and fisheries accounted for 36%). In addition, 48% of the
in 2009 portfolio is invested in Sub-Saharan Africa, compared to
A portfolio of 9.4 million euros, invested 43% in 2008 (see figure 1).
Caribbean
CEECs in 65 partners in 29 countries
Mediterranean 9 % 1%
At 31 December 2009, SIDI held a portfolio of 9.4 million SIDI seeks to contribute, to the extent possible, stable re-
Basin 9 % euros, a slight increase of 1.54% over 2008. Disinvest- sources that provide solidarity to its partners. To that end,
ment over the year, amounting to two million euros (simi- its portfolio was invested as follows:
lar to 2008), was in line with forecasts. On the other hand,  60% in local currency (56% in 2008), which relieved
Asia the 2.2 million euros of new commitments accounts for partners from exchange rate risks (see figure 2);
13 % 81% of planned spending. This is explained by the fact  45% in equity financing (43% in 2008), which is the
that investments in two funds, FEFISOL and FOPEPRO, type of investment that is the most supportive and durable
were carried forward to 2010 (see page 12). (see figure 2).
Africa
Latin America
48% Ten new partners received financial support in 2009. The risk inherent in these investments, along with SIDI’s
20%
These are the investment fund for the Andean countries, activities in crisis zones (see the social responsibility re-
FOPEPRO; the management company in Latin American, port, p. 7), must not compromise SIDI’s capacity to provide
ACEROLA; the MAIN network in Africa; the INDEPCO tai- sustainable services to its partners. That is why SIDI strives
lors’ federation in Haiti; the MFIs ASALA in Palestine and to lessen the risk in the following ways:
PAMF in Madagascar; the fishermen’s association CGRH
Figure 2 - Destination in Senegal; the companies BIOSUSTAIN in Tanzania, HIEP  Forty-one percent of the portfolio is invested in MFIs
by type of investment THAN in Vietnam; and ETC and SINERGI in Niger. These with strong economic and social potential, five of which
partnerships account for one fourth of SIDI’s investments pay dividends; 21% is invested in funds and umbrella or-
Guarantee over the year, the remainder being devoted to strengthe- ganisations that are lower-risk partners that provide local
Equity financing
Equity financing 10 % ning support for existing partners, mainly SIPEM in Mada- leverage (see figure 3).
in local currencies
in hard currencies gascar; CAFEPERU in Peru (in order to be in step with
 No single country in which SIDI intervenes accounts
37%
9% their capital increase); ESCALES JAPPOO in Senegal; and
TAANADI and KOKARI in Niger via the granting of local fi- for more than 11% of the portfolio and no partner receives
nancing guarantees for the development of their portfo- more than 5% of investments, with the exception of KRK
lios. Lastly, seven loans that came due were renewed. in Kosovo. KRK received a loan of 700,000 euros granted
via SIDI by the Faim et Développement mutual fund. In-
Furthermore, SIDI recovered all the invested capital that deed, part of the outstanding balance of this fund finances
Loans in hard had fallen due in the Southeast Asia investment fund, entities that have been granted the label solidarity com-
currencies MAF; this was the only withdrawal of the year. pany, such as SIDI.
21% Loans in local currencies The average investment per partner amounts to 145,000
23% euros.

4  The activities of sidi and its partners in 2009


Solidarity in 2009
Sixty-four percent of this support and advice time was de- Figure 3 - Destination by
voted to SIDI’s African partners, which confirmed SIDI’s category of the portfolio
SIDI supported 92 partners in 33 countries in 2009. More commitment to this continent. Half of the time was spent
particularly, its technical assistance provided to 65 financial on partners undergoing development and those in rural Network
partners enabled SIDI to reduce significantly risks to its ca- areas. PO 1 % MUSO
pital. As a result SIDI has in-depth knowledge of their acti- Funds 3 % 1%
9%
vities, their context and their socio-economic situation and The Solidarity Chain for Financing pro- MFIP
UMBRELLA 39 %
is in a position to work with them to overcome their diffi- vides double support 11 %
culties. Support for SIDI’s partners enables them to benefit from
a la carte backing in many areas (see above) and it is pro-
Support that solves partners’ problems vided cost-free to the partners. SIDI’s economy is founded PAVRA
Apart from monitoring the structures in which it invests, SIDI on a Solidarity Chain for Financing (fig. page 16), which 12 %
also provides technical assistance services to its partners so serves to mobilise funds in the North and support partners
that they may develop, improve and continue to provide ser- in the South in the following ways:
 First, CCFD-Terre Solidaire financed SIDI’s technical
MFIC
vices into the future. 24 %
In 2009, this support, provided by the internal team assisted assistance mission to the tune of 1.2 million euros, which
by 15 volunteers, experts from financial circles, banks and accounts for 80% of support grants, in particular thanks to
companies, was equal to 2,222 days of work i.e., on average the shared income from the Faim & Développement mu-
24 days per partner. tual fund that in 2009 amounted to 549,000 euros.
This support mainly consisted of technical assistance ser-  Next, SIDI successfully negotiated with six donors the Figure 4 - Destination of TA
days by region in 2009
vices during field missions and covered the following subject amount of 116,000 euros in cofinancing for the benefit of
areas: four partners who support small rural producers (see p.
 long-term viability problems in areas such as gover- 12). Eastern Europe 4 %
Mediterranean Caribbean 4 %
nance, strategy, innovation and institutionalisation, 21% SIDI’s other income is generated by the following invest-
 internal organisation i.e. accountancy, IT systems,
Basin 5 %
ment activities, among others:
 The SIDI portfolio (loans and equity financing) gene-
Asia 7 %
human resources and training, 13%
 negotiations for additional resources from public or rated income of 496,000 euros in 2009. In that connec-
private bodies, 10% tion, the collection of interest from loans increased by 69%
 analysis of the portfolio and products, 8% over the year, which nearly made up for the fall in the num- Latin
 reflection on social value-added, 4.5%. ber of structures distributing dividends in 2009.
The additional time was devoted to identifying new part-  Income of 320,000 euros from the cash account, 16%
America

ners and creating two investment funds for the Andean re- thanks to the recent recovery on the financial markets. Africa
gion and Africa (22%), to participating on the boards of Financing of SIDI’s partners is guaranteed for the four 64%
directors of which SIDI is a member (13%) and to keeping years of the strategic plan, 2009-2012, thanks to the 4-
an eye on SIDI’s portfolio i.e., loans and equity financing million euro capital increase decided in mid-2009. At that
(8%). Lastly, employees and volunteers spent 832 addi- time the shareholders, in particular individuals, mobilised
tional days on horizontal themes, essentially focusing on and increased their numbers from 820 to nearly 1,200
strategy, organisation, SIDI alliances and on subjects re- members (see figure, p. 16). Figure 5 - Destination
quiring a common reflection to define a SIDI approach, by approach
such as the Social Viability process (p. 8), the support for As a result of extensive work over the past four years,
solidarity credit unions, the reflection on Fair Trade and the which was stepped up in 2009 in order to mobilise seve- Others 3 %
Network 7 %
promotion of value-added in rural areas (p. 10). ral institutional investors, we expect 2010 to mark the Funds
MUSO 10 %
start-up of the two investment funds. 19 %
This work required a budget of 1.48 million euros – equal
to 72% of SIDI’s operating expenses, the rest being taken FEFISOL and FOPEPRO will enable SIDI, which created UMBRELLA
up by headquarters expenses – which is 16% less than these two funds along with Alterfin/Belgium and Eti- 11 %
the previous year. This decrease is explained by a fall in mos/Italy, to achieve significant leverage effect and gene- PAVRA
MFIP
support grants to partners and by the time and energy de- rate an expected 60 million euros by the end of 2012.  13 % 10 %
PO 9%
voted to the creation of the regional investment funds FE-
FISOL and FOPEPRO. MFIC 18%

The activities of sidi and its partners in 2009  5


Sharing risks fairly
and patiently
One of SIDI’s
distinguishing traits is
that its shareholders Investing in In 2009, SIDI lent 25 million CFA francs (38,000 euros) to
agree that its capital FECECAV in Togo, on top of the 50 million CFA francs lent
should be invested in partners’ equity in 2008, to support the development of its rural activities, in
its partners in a SIPEM in Madagascar, SINERGI and ETC in Niger, CA- particular agricultural financing.
supportive way, which FEPERU in Peru and ESCALES JAPPOO in Senegal
enables SIDI to offer SIDI also rolled over two loans for the purchase of inputs
sustainable and low- Acquiring a stake in the capital of local financing structures granted to the MOGTEDO rice farmers’ co-op in Burkina
cost resources as well is SIDI’s preferred means of intervention because it provides Faso (15 million CFA francs – 23,000 euros) and to the Fé-
as to share some of sustainable and low-cost development of their activities. In- dération des Paysans du Fouta Djalon in Guinea (126 million
the risk with them. deed SIDI encourages limited dividends until the institution CFA francs – 193,000 euros).
has reached significant financial autonomy. At the end of And SIDI extended a loan to the Nianing Fisheries Resources
2009, 45% of SIDI’s portfolio was invested in equity finan- Management Committee in Senegal in order to finance a
cing. solar fish dehydrator with the aim of preserving fishery pro-
During the year, SIDI invested in SIPEM’s capital in order to ducts over a longer period of time.
maintain its commitment in a context beset by several major Lastly, SIDI granted a 619 million dong loan (23,000 euros)
difficulties, such as the development of competition, deve- to HIEP THAN, a rural company in the north of Vietnam, to
lopment of new products and a political crisis. It also step- finance investment in a tea processing unit (p. 10).
ped up its stake in ESCALES JAPPOO, a small chain of
solidarity restaurants that is struggling with the tourism crisis
in Senegal. SIDI invested as well in the capital of two struc-
tures in Niger, enabling it to finance agricultural processing Activities in crisis zones
(see inset opposite) and in Peru, SIDI contributed to CAFE- SIDI is pursuing its commitment to partners in countries
PERU’s capital increase in order to back the development of where political tensions run high, such as Palestine, Gui-
this group of six coffee producer co-ops, which offers to its nea, Niger, Madagascar, the region of the African Great
member shareholders, and to other co-ops, marketing, fi- Lakes and in areas suffering from natural disasters, such
nancial and technical assistance services. In particular, these as Haiti. The challenge is to be part of the development of
funds will enable the company to borrow locally under better sustainable financial services in a difficult context that
terms. makes these services all the more necessary.
At the end of 2009, SIDI held shares in 28 structures, in
which its average investment was less than 20% of the ca- In Palestine, the mechanism used to cover contextual risk,
pital, in line with its aim to be a significant but minority sha- set up at the start of 2008 with European supporters for
reholder in such structures. the benefit of ACAD, has helped it to resume its lending
activities that had been suspended because of occupa-
tion-related risks. The financial support negotiated by SIDI
Lending in local currency with the AFD was crucial to enabling ACAD to consolidate
MOGTEDO in Burkina Faso, FECECAV in Togo, FPFJ in and expand its activities. At the start of 2009, ACAD un-
Guinea, CGRH in Senegal and HIEP THAN in Vietnam veiled its risk-coverage mechanism to the association of
Palestinian MFIs, SHARAKEH. Once SHARAKEH confir-
While local financing structures in the South now manage to med that all the members were indeed implicated in this
borrow on financial markets more easily, thanks in part to the problem, it commissioned SIDI to study the ways and
solid progress of microfinance development funds, these means of institutionalising this mechanism. SIDI and SHA-
loans are mainly granted in euros or dollars, which protects RAKEH are examining the creation of the Refinancing and
the lender from exchange rate risks but requires the local fi- Guarantee Society, of which they will be the founding sha-
nancial structures, and their beneficiaries, to shoulder the risk. reholders. Since 2008, SIDI has been giving financial sup-
SIDI wants to share this risk and that is why it has set up a port to ASALA, the Palestinian microfinance organisation
2-million euro guarantee fund, called the Development In- for women, via a five-year loan of 100,000 dollars. This
centive Fund, whose income covers risks of exchange rate loan outstanding was doubled in 2009 in order to provide
losses. As a result, 42% of loans and guarantees are deno- backing for the growth of the ASALA.
minated in local currencies.

6  The activities of sidi and its partners in 2009


Furthermore SIDI began a financial relationship with IN-
DEPCO, a new partner in Haiti. This association brings to-
gether several hundred rural and urban tailor shops on
behalf of which it negotiates orders from the state, mainly
for school uniforms and satchels, as well as from compa-
nies. Because it groups the production capacity of its
members, INDEPCO is able to accept orders for thou-
sands of items; the production work is then distributed by
turn among the shops. Thanks to this networking IN-
DEPCO is able to offer training and technical assistance
services. At the end of the year, SIDI lent 100,000 dollars
to INDEPCO to develop its activity as wholesale purcha-
ser of raw materials on behalf of its members. 

Social responsibility report

RISk

Locally financing the promotion


GOVERNANCE SUPPORT
of value-added in rural areas:
ETC/SINERGI
LEVERAGE
EFFECT
ADAPTATION
RANGE OF SERVICES
SIDI has been active in Niger with two partners for the last several years, KO-
KARI, a credit co-op that works with producers’ organisations, and TAANADI,
which lends to village banks and offers savings services. In order to have a
greater impact on the financing of agricultural production and processing, SIDI
RISK identified in 2009 two new structures with which it has set up a unique part-
nership:
 Share of the portfolio in local currency 60 %  SIDI acquired a 5% stake in the capital of SINERGI, a local private equity
 Share of the portfolio in equity financing 45 % firm that seeks to support the country’s formal and informal very small, small
 Share of the portfolio in crisis zones* 24 % and medium sized companies and whose role is to provide not only funds but
 Share of the portfolio in Sub-Saharan Africa 49 % in addition personalised support to entrepreneurs. Thanks to its participation on
 Share of the portfolio for financing rural areas** the investment committee, SIDI will be able to boost the impact of its actions.
 Furthermore, SIDI, in concert with SINERGI, has invested in an SME in Nia-
62 %
 Share of the portfolio for financing agricultural
and fishing activities** 36 % mey, ETC-Céréales, that collects, transports and processes cereals (flour and
 Share of the portfolio for financing developing institutions 57 % pre-cooked couscous) and then markets them wholesale and in chain stores.
> 71% of the total number of financial partners In particular, the formalisation of the structure, which was accomplished thanks
to the availability of capital from SIDI and SINERGI, has enabled ETC-Céréales
to set up a cereals processing shop.

This tripartite arrangement enabled SIDI to support an initiative that enhances


agricultural activities, an experience that could be repeated elsewhere, and to
* Political conflicts or natural disasters – Countries in crisis: Guatemala, work directly with SINERGI on an activity that promotes agricultural invest-
Haiti, Niger, Madagascar, Palestine, Guinea, Colombia, DRC and Leba-
non. ment. The end goal was to boost support to SINERGI in order to help, via the
** Financing for rural areas is exposed to greater risks owing to local cha-
leverage effect, the country’s agricultural processing initiatives and to identify
racteristics, in particular farming activities and fishing, which are subject to among the customers of KOKARI and TAANADI those able to benefit from the
highly unpredictable external factors that increase the risk of financing, such support of SINERGI.
as input price variations (fuel, fertilizer, seeds, etc.), risk of agriculture di-
sasters (drought, locusts, etc.) as well as fluctuations in sale prices.

The activities of sidi and its partners in 2009  7


Providing accessible
and flexible support
SIDI strives to respond in an individualised way to its partners’ Lastly, the duration of the partnerships that SIDI offers is not limited in
expectations. It tailors its services and the volume of its support to advance, which helps it to understand better the context in which it is
each partner’s identified needs (social responsibility report, p. 9). intervening, to built a relationship of trust with its partners and to
appreciate and promote its partners’ value-added in their relationships
In addition, SIDI uses donations from the Solidarity Chain for Financing, with their beneficiaries. In 2009, this support activity (detailed on
including the shared income from the Faim & Développement mutual p. 5) focused on partners in difficulty. Moreover, SIDI set up a new
fund, to adapt its financial terms and conditions to local requirements approach strategy to supervise the social dimension of its partners.
and contexts, offering highly-appreciated and useful technical Finally, some partners have benefited from enhanced support for their
assistance. long-term development (strategy and institutionalisation) and training
for their staff and managers.

Promoting social dimen- for covering the costs of related assistance. RED FASCO
defined the criteria and indicators that it wishes to pursue
sion follow-up and set the conditions for their measurement.
 Work is advancing with CAC la Florida in Peru, which
RED FASCO in Guatemala, CAC la FLORIDA and FOR- places social concerns at the heart of its strategy. In 2009,
TALECER in Peru, BMS in Mali, MAIN in Africa and HKL this coffee growers’ co-op finalised a study on the vulnera-
in Cambodia bility of its members, whose capitalisation, carried out by
SIDI, brought to light the sustainable social changes in fa-
SIDI gives priority to partnerships that have structures with milies as a result of the resources set in motion. The out-
a strong social vision. Providing financial and non-financial come of this capitalisation will enable SIDI to systematise
services must not be an end in itself, but rather a means to the tool used to measure vulnerability, which may then be
contribute to the wellbeing of the beneficiary populations. It offered to other partners, for example in Peru, where CAC la
is therefore important to bring this social vision into line with Florida unveiled it to its partners in CAFEPERU.
their practices on the ground. That is what the Social Viabi-  MAIN, the association of African MFIs, introduced in
lity initiative, started in 2001 by SIDI, is all about. It has led 2009, with the help of SIDI, the social dimension in its di-
to a common approach for backing partners in their advan- ploma training scheme that is offered to managers in the
cement of the social dimension. microfinance sector at the UCAC University in Yaoundé and
In 2009, the operational staff devoted a great deal of effort the UMU University in Kampala.
to this theme. Each desk officer got involved via internal trai-
ning and SIDI redefined the social dimension of its services
in the following way:

 by supporting partners’ definition and clarification of Getting involved in


their social goals;
 by setting out a work plan in keeping with these goals;
institutions’ development
 by supporting them in their application of this plan and SIDI’s priority is to work with institutions that need significant
providing follow-up. and sizeable support. Such is the thrust of the Solidarity Chain
for Financing, which provides sustainable technical assistance
SIDI wants to gradually lead all its partners along this path services. In that connection, most of SIDI’s partners are deve-
by providing technical support to them without doing all the loping institutions, i.e. with one or more of the following charac-
work itself. What is most important is that each partner teristics:
should seize on the advantages of supervising the social di- 1. A level of development activities that has not attained pro-
mension, which enables them to measure the sustainable fitability yet;
improvements in the beneficiaries’ wellbeing. 2. A necessary and sustainable level of technical assistance;
3. A potential for institutional development and growth in the
Above and beyond this teamwork, the following initiatives identified activity;
with the partners achieved progress in 2009: 4. In certain cases, an economic, social and/or political context
 SIDI, along with RED FASCO, a financial instrument of that objectively hampers the institution’s development.
Maya community organisations in Guatemala, organised Consequently, SIDI focuses its efforts on the long-term viability
two social dimension workshops and negotiated resources of its partners.

8  The activities of sidi and its partners in 2009


In 2009, SIDI began long-term work on development prospects lighting and small-scale income-generating items and activities,
with ASIENA in Burkina Faso (see inset opposite). Furthermore, such as a freezer, market gardening with pumped water, re-
SIDI assisted in the strategic planning of UGC-CPC in Mo- charging mobile phones, etc. The success of this initiative, fi-
zambique (PO network), of CREC in Senegal and CAC la Flo- nanced by SIDI in partnership with the Midi-Pyrénées Regional
rida in Peru. Council and Frères des Hommes Italy along with UGPM, may
well lead to the provision of autonomous energy solutions in
SIDI has devoted considerable resources to a thorough eva- Senegal’s rural areas. The evaluation, as well as a market study,
luation of the Jarinoo Jant Bi rural electrification programme was conducted in 2009 with the idea of drawing up a business
that was launched in 2006 by UGPM in Senegal. This pro- plan to attract potential investors. 
gramme enables farmers in the area, thanks to an innovative
system of loans, to acquire solar photovoltaic equipment. Via a
monthly payment similar to the cost of non-renewable energy
(candles, petrol, batteries, etc.) they gain access to electricity for Backing for ASIENA in Burkina Faso:
assuring medium- and long-term
viability
Social responsibility report ASIENA is an association that brings together most of the women’s religious
congregations in the country. It is developing a health insurance programme for
its members, a savings and loan programme for the population and since 2006
RISk
has been supervising the creation, monitoring and refinancing of solidarity cre-
dit unions in the southwest of the country. SIDI, along with ASIENA, stepped
in to provide help at the request of CCFD-Terre Solidaire. In the wake of diffi-
GOVERNANCE SUPPORT
culties encountered in granting individual loans and after careful consideration
and tests, ASIENA decided to work with the solidarity credit union tool.

Together with the development of these programmes, a need arose in 2008 to


LEVERAGE ADAPTATION
EFFECT RANGE OF SERVICES strengthen ASIENA’s organisation. This was the focus of the considerable tech-
nical assistance provided to the association in 2009 by the desk officer and a
volunteer consultant. The support missions centred on the following:
SUPPORT
 Total number of days of support (including 23%  the preparation of a 3-year business plan with the management, an exer-
volunteer consultancy) * 2 222 days cise which also served to train the management;
 Percentage of days devoted to technical assistance 56%  training for the team in how to use the tool for supervising the activities of
 Percentage of technical assistance solidarity credit unions, to which SIDI also invited representatives of AOPP in
for partner beneficiaries 53%
 Percentage of days devoted to technical assistance
Mali to exchange experiences;
 an examination of a new law on microfinance, the PARMEC law in the CFA
for developing partners 86%
 Percentage of days devoted to technical assistance
franc zone, in order to verify the legal compatibility of the solidarity credit unions;
 accountancy monitoring;
 lastly, the start of a reflection on the advisability of changing the associa-
in the field in support of the social dimension 8%
 Number of days devoted to horizontal reflection,
including 90days on social value-added 529 days tion’s by-laws, on the problems of solidarity credit union representation, com-
 Average length of partnerships (current) 7 years pliance with the PARMEC law and facilitated access to external finance.
 Average length of financial relationships Today, ASIENA has shored up its viability. Its activities are expanding and local
with partners (current)** 6 years staff has been hired. But the work must continue, the solidarity credit unions’
network must grow and the following considerations must be examined:
* While all LFSs are monitored, SIDI nevertheless adapts its technical - adaptation of its legal status to savings and loan activities;
assistance services to their needs. Only half the partners benefit from tech-
nical assistance, which is focused on structures that are in the develop- - the advisability of a more formal association with the solidarity credit
ment phase. unions;
** The average partnership lifetime is quite long and is a good illustration - a relevant lay/religious coordination at all levels (board of directors,
of SIDI’s strategy of promoting fledgling or developing LSFs in order to management and activities).
back them over the long haul until they can function on their own. As a re-
sult, today 26 LSFs have been partners for seven years or more. Further- Under an agreement now being prepared by the two partners, SIDI will assist
more, financial support is delivered on average one year after the start of the ASIENA in making a success of all these initiatives.
partnership, which confirms SIDI’s wish to build first and foremost a rela-
tionship of trust.

The activities of sidi and its partners in 2009  9


Adapting the range of services
to the local context
While microfinance is
well developed
Supporting • Identify quality importers, such as organic and fair trade net-
around the world, producers’ organisation works, among others, that may be interested in products, intro-
with about 150 million duce them to producers and support their relationship;
beneficiaries, it is still MOGTEDO in Burkina Faso, FPFD in Guinea, ADAPS • Conduct searches for subsidies for organic conversion or cer-
often limited to the and ALAOTRA/SILAC in Madagascar, AOPP in Mali, tification and grant pre-financing;
least risky zones and CGRH and UGPM in Senegal, MAPTO in Togo and CAC • Support agricultural processing projects;
sectors. For example, la FLORIDA in Peru • Back producers who create financial services for their mem-
around 80% of the In rural areas, and in the particular case of farmers, lending is bers or who bring them into contact with MFIs (Madagascar, Mo-
beneficiaries of a risky business (see social responsibility report, p. 7). Never- rocco, Lebanon, Tanzania and others).
microfinance theless, there is a great need for financing especially in pro-
institutions are located ductive investments. SIDI’s approach consists of working In 2009, SIDI initiated or pursued the following partner-
in urban areas. mainly with farmers’ organisations that are able to take on col- ships along these lines:
Moreover, customers lective projects that benefit their members in a sustainable  In Niger, with ETC and SINERGI, to support cereals pro-
want products that are way. cessing (see inset p. 7).
more in tune with For example, SIDI renewed its seasonal credit to the Fédéra-  In Tanzania, with BIOSUSTAIN, a socially responsible
their needs, such as tion des Paysans du Fouta Djalon in Guinea, enabling it to buy company that works with cotton and sesame producers (see
longer-term and larger certified potato seeds and adapted inputs; the loan was re- inset opposite);
loans, in addition to paid at the end of the season. SIDI is continuing its support to  In Vietnam, with the company HIEP THAN that works
savings products. the Mogtedo rice growers’ co-op in Burkina Faso so that it can with underprivileged ethnic minorities in the north of the coun-
Lastly, conventional buy fertilizers. It also renewed its guarantee to ADAPS in Ma- try. This company has a strong social vision and wishes to de-
microfinance is rarely dagascar, which will give it access to financing of 20,000 euros velop a tea production chain that would provide a maximum
able to fulfil the from a local bank to be used to pay cocoa growers upon de- of value-added to producers. To achieve that, an association
requirements livery. Finally it continued its commitment to UGPM in Sene- was set up to support the development of sustainable far-
expressed by very gal in the following three areas: financing for solidarity credit ming practices and an export sector was created for organic
small, small and unions, financial and technical support for the programme that and fair trade products. SIDI lent 23,000 euros to the com-
medium sized backs family holdings and the advancement of the JARINOO pany to pay for the installation of a black tea production unit
enterprises and JANT BI rural electrification project (see p. 9). and wishes to support HIEP THAN in its quest for interna-
farmers’ organisations, tional outlets and in its reflection on the advisability of provi-
which seek financing ding financial services to the sector’s inhabitants.
for their productive  In Ecuador with FAPECAFES, a group that wants to in-
investments. For that Promoting value-added in crease production and develop financial services for its 1,500
reason, SIDI is working
with its partners on
rural areas members. SIDI is advising the organisation in its strategic re-
flection on this subject and granted it a cash loan of 100,000
financial solutions that CORECAFE, FAPECAFES, GRUPPO SALINAS and dollars at the end of the year to finance the coffee season.
meet these needs. In MCCH in Ecuador, INDEPCO in Haiti, LFP in Laos, FTL in SIDI’s current challenge in pursuing actions underway is to
rural areas, SIDI Lebanon, ETC and SINERGI in Niger, CAFEPERU in boost its internal capacities in the area of agricultural finan-
favours innovative Peru, BIOSUSTAIN in Tanzania and HIEP THAN in Viet- cing by capitalising on existing experiences and through trai-
approaches with nam ning and recruitment of volunteers in order to continue
partners, such as A recurring problem for producers in the South is their low supporting partners in this complex field.
producers’ capacity to gain benefit from their own production. Farmers
organisations, suffer from raw materials price instability and have diffi-
companies, solidarity
credit unions and
culty finding outlets. As a result, it is a challenge to bring
about lasting change only through the contribution of fi-
Promoting solidarity credit
others, who look nancial services because an increase in production will not unions
beyond the always mean a similar increase in revenue. That is why SIDI West Africa (Senegal, Mali and Burkina Faso), Central
conventional decided to work on the Promotion of Value-added in Rural Africa (DRC, Rwanda and Burundi), Haiti and Madagascar
microfinance field. Areas, known by its French initials, PVAR. It specifically tar- A solidarity credit union is a mutual assistance group whose
gets producers’ organisations and businesses working with members all contribute equally in order to have a self-managed
rural areas to develop their processing and marketing ca- and local savings and financing tool with an emergency fund
pacities in an environmentally-friendly way. More specifi- that provides access to health care. Solidarity credit unions also
cally, SIDI’s support seeks to do the following: serve as a place to exchange experiences on activities, problems

10  The activities of sidi and its partners in 2009


and launch common projects in health matters, collective in- Today, there are more than 50,000 persons involved in the so-
vestments, seed purchases, etc. lidarity credit unions that have been identified by SIDI, particu-
SIDI is working on training, an information system, strategy larly in rural areas.
and financing with around a dozen organisations that promote
solidarity credit unions, particularly in far-flung rural areas. In
2009, SIDI focused its efforts on the following: Meeting training needs
 Training of leaders: Solidarity credit unions are socially- SIDI responds on a regular basis to the training needs expres-
minded organisations that work with money, which may be di- sed by its partners.
verted from its goals, invested at the wrong pace or simply To cite one example, SIDI is pursuing its reinforced technical as-
poorly monitored and as a result may jeopardise the members’ sistance drive in the Great Lakes region via the ongoing pre-
contributions, increase inequality and create internal conflict. sence of a desk officer, who in 2009 set in motion many training
Therefore, the leaders of solidarity credit unions, which belong schemes for credit officers and accountants of partners located
to organisations that promote such credit unions, provide the in the area. The use by staff of high-performance management
absolutely essential support that is key to their success. tools led to considerable development of the solidarity credit
 Training in software used to monitor solidarity credit unions, union network (see above). Moreover, SIDI made available a
developed by SIDI to gather reliable data that is used by soli- desk officer who oversaw a rural financing module that was part
darity credit union programme directors for purposes of ana- of the training schemes offered to employees of MFIs that are
lysis and communication and to coordinate the work of leaders. members of MAIN. 
 The activation of a large capitalisation project in order to
review the strengths and weaknesses of the solidarity credit
union methodology and to elucidate prospects for improve-
ments. This project has been continuing in 2010.
Support for a rural business:
BIOSUSTAIN
With the aim of attaining its goal of improving rural income, in 2008 SIDI
decided to begin relations with a rural business located in the north of
Social responsibility report Tanzania that buys and markets cotton and sesame from small local
producers.
RISk BIOSUSTAIN’s aim is to promote organic farming that meets the needs
of farmers. To that end, the company offers farmers the following
additional services:
GOVERNANCE SUPPORT # BIOSUSTAIN familiarises with and trains farmers in organic
farming principles,
# it undertakes in advance to buy the harvest and farmers agree
to produce organically,
LEVERAGE ADAPTATION # it provides inputs (organic seeds and pesticides) on credit,
EFFECT RANGE OF SERVICES
repayable later from the harvest’s proceeds,
# lastly, it gathers the harvest and makes sure it meets export
requirements as follows:
ADAPTING OUR RANGE OF SERVICES o Sesame is cleaned in keeping with EU standards
 Amount of loans granted in 2009 829 152 EUROS o Cotton is separated from the seed in a cotton gin
of which dedicated loans 63 % plant
 Share of new loans devoted to:
The company, thanks to its social and environmental vision, is able to secure and
• Medium-term financing (> 3 years)* 14 % improve the income of more than 3,000 farmers. In mid-2009, SIDI granted it a
• Financing of productive investment* 27% loan of 100,000 dollars over 18 months, enabling BIOSUSTAIN to finance the
• Financing of rural businesses 26% cotton and sesame harvests.
• Financing of organic farming** 7% SIDI is deeply involved in the monitoring of the company and supports its planning
• Financing of renewable energy carried out in 2008 with a view to achieving a better definition of priorities and adjusting resources and
• Financing of fair trade** 26% debt in tune with its needs. It also backs BIOSUSTAIN in its search for European
 Number of solidarity credit unions backed by SIDI partners 2 500 importers. Apart from the fact that more farmers are getting involved in the
process, the long-term challenge is to find the financing arrangements so that the
company can acquire a cotton gin plant and make use of the processing technique
* Medium-term financing, and more specifically productive investment, is not
common in the South, which is why SIDI devotes a share of its resources as well as reduce cotton transport costs. This initiative is being conducted in
to it. association with CORDAID/Netherlands, an associate of SIDI and a partner of
**Fair trade and organic production are appealing, beyond their social and
environmental aspects, because of their potential outlets in the North and BIOSUSTAIN.
improved promotion of local products.

The activities of sidi and its partners in 2009  11


Creating support
mechanisms
As an actor of social
development, SIDI
actively seeks to
mobilise the efforts of
other institutions, both
to promote its own
vision of solidarity
financing and to
acquire
complementary
resources for its
partners. Indeed,
whilst its own
resources are solid and

© Biosustain
stable, on their own
they are not sufficient
to respond to the
needs expressed by
the partners. Investing in refinancing microfinance is often analysed as an activity that should be lar-
Furthermore, at a time gely profitable.
when commercial
instruments Furthermore, SIDI has established a relationship with FIN-
microfinance is FEFISOL and SMF EA in Africa, FOPEPRO in Latin RURAL, an umbrella institution of Bolivian MFIs, which wishes
experiencing strong America, SEFEA in Europe, FINRURAL in Bolivia, TEM- to create an instrument that will be able to use to refinance its
growth, SIDI would BEKA in South Africa, BMS in Mali, RED FASCO in Gua- members. Finally, SIDI has undertaken a feasibility study in
like to reaffirm the temala, FENACOOP in Nicaragua, FORTALACER in Peru Haiti with KNFP regarding the creation of a rural fund, the
need to support the FRICS, which began its activities mid-way through the year
local development SIDI invests in regional funds in order to respond to its part- (see focus opposite).
actors, particularly the ners’ increasing financing requirements. The provision of
rural actors, who, support by the means of such “secondary level” instruments
despite their social presents three advantages: Networking and collabo-
usefulness and  they create leverage through the mobilisation of finan- rating with other alliances
potential, are not yet cial resources from other donors
profitable.  they allow for the sharing of risks CCFD-Terre Solidaire, Frères des Hommes Italy, Fon-
 they make possible the better targeting of the actors in dation Poweo, the Ministry for Foreign Affairs, AFD, EU,
the area of intervention. SICAV Nord/Sud, Merkur Bank, Oikos, Calvert Founda-
tion, Feu Vert pour le Développement…
Amongst the actors identified as part of this process, SIDI fa- SIDI is consolidating its relationship with CCFD-Terre Soli-
vours, in particular, the instruments created by the local insti- daire, in accordance with the desire expressed by the two
tutions themselves, since they have the advantage of being institutions to work in a more complementary fashion in the
well acquainted with their environment and have the capacity field and also to propose a shared vision of an alternative
to work together. In this way, SIDI has been able to carry out form of financing for development.
work on the social performance of the institutions, with BMS In 2009, 23 partnerships were able to benefit from joint sup-
in Mali and RED FASCO in Guatemala, whose respective port provided by SIDI and the CCFD, thereby confirming the
members have taken onboard the conclusions of this work. worthwhile nature of an approach that combines financing,
In 2009, SIDI worked with its partners in order to bring about technical assistance and subsidies as part of a process des-
the creation of two solidarity investment funds, FEFISOL for igned to bring about fair development.
Africa and FOPEPRO for peasant farmers in the Andean re- Furthermore, in 2009 the work devoted to the mobilisation of
gions. FOPEPRO was established at the end of 2009, and the donors for the benefit of the partners represented 10%
progress had been made regarding the creation of FEFISOL, of the time spent by SIDI on technical assistance.
notably through the identification of potential investors. In It this way, it has been able to obtain almost € 116,000 in co-
both cases, the challenge is precisely that of attracting the in- financing for the AOPP in Mali, the Fonds Coopératif in Laos
terest of public or private institutional investors in an approach and the following Senegalese partners: JAPPOO, JARINOO
that is essentially solidarity based, in an environment in which JANT BI and JARDINS D'AFRIQUE, a JAPPOO partner,

12  The activities of sidi and its partners in 2009


which benefitted from financing for the installation of a solar rural MFIs and other financial institutions in this regard. At
pumping system at its agri-organic teaching farm. this event, SIDI was able to share its knowledge of Western
Finally, SIDI negotiated direct re-financing for a total of € 1.3 African experiences in this area and also called for the inte-
million from its alliances for ACAD in Palestine and CREDI- gration of the KNFP from Haiti, which presented the expe-
FLORIDA in Peru. rience of the Solidarity Credit Unions.
• maintained its commitment to the MAIN (a network of 90
SIDI is also involved in several networks and this enables it African MFIs which provides training and experience sha-
to exchange views on practices, to meet other actors or even ring), which took the concrete form of financing (cash ad-
to develop joint projects. In 2009, SIDI: vances, loans) and of technical assistance (accounting, aid
• maintained its active presence on the Board of Directors of to seek out financing). In particular, it facilitated the esta-
INAISE, the International Association of Investors in the So- blishment of a MAIN representation in Europe and contribu-
cial Economy, of FEBEA, the European Federation of Ethical ted to the creation of a database on the activities, training
and Alternative Banks and also of Epargne Sans Frontières. needs and satisfaction of its members. 
• took part in the work of the FOROLACFR network in Latin
America, which brings together 370 MFIs and whose work is
designed to improve the provision of financial services in rural
areas. In particular, SIDI provided assistance at the FORO-
LACFR conference on food securitisation and the role of The Fonds Rural d'Investissement
et de Crédit Solidaires (FRICS)
Social responsibility report in Haiti
The KNFP, a partner of both SIDI and CCFD-Terre Solidaire in Haiti, is a network
RISk
of nine popular financing institutions that provides support to the farmers’
organisations and training for the leaders of Solidarity Credit Unions through
its Mobile Training Institute (IMOFOR).
GOVERNANCE SUPPORT With a view to responding to the need to strengthen the provision of support to
rural areas, the network initiated a process of reflection with its local partners
some five years ago on the conditions surrounding the financing of the rural
world (access, cost). In May 2009, this process of reflection, strongly supported
LEVERAGE ADAPTATION
EFFECT RANGE OF SERVICES by SIDI, led to the creation of a rural fund, known as the FRICS (Rural fund for
Investment and Social Credit). Its purpose is to finance enterprises, small
enterprises, farmers’ organisations and cooperatives in the agricultural,
livestock breeding, fisheries and agricultural processing sectors, as well as the
LEVERAGE EFFECT trade and small craft industry and employment generating rural services that
 Number of partners who have benefitted from leverage generated by
are not driven by speculation. The original nature of the FRICS will lie in the fact
that its services will be made available across the country through the networks
SIDI Mobilisation of capital, loans, guarantees or subsidies acquired through SIDI 6
 Amount of subsidies obtained as a result
of the member institutions of the KNFP.
€ 125,332
Whilst at present this remains a project that is dependent upon the KNFP, the
of SIDI’s intermediation
 Amount of loans mobilised as a result of SIDI’s intermediation
FRICS has, nevertheless, already granted funding on an experimental basis,
€ 1,3 M
which has made it possible to begin activities and to test the financing
amongst allies in the North
 Number of days devoted to the search
methodology even before the formal creation of the fund:
- financing of mango producers,
€ 760,000
for complementary funding for the partners* 210 days
 Amount of new guarantees committed by SIDI
- financing of the purchase of yokes for two cooperatives in the north of the
€ 1,020,000
country,
Amount mobilised from banks at the local level
- granting of a loan to the dairy cooperative, Lèt a gogo, which promotes the
For a leverage effect of 1.35
 Number of end clients of the umbrella
consumption of quality local dairy products.
Both the KNFP and SIDI firmly believe that a major part of the response to the
organisations and funds 751,216
 Number of active end borrowers
devastation caused by the earthquake lies in the relaunch of agricultural
1,330,840 production and processing. SIDI, together with the CCFD, is willing to assist
Of which, 54% women and 65% in rural areas
 Number of active end savers
this development: it is currently supporting the network in its efforts to bring
1,246,672 about the institutionalisation of the FRICS and has put its name forward to
Of which, 49% women and 57% in rural areas
 Number of producers who are members of partner Producer
become a founder member of the fund and, to this end, is prepared to acquire
a share in its equity capital and to provide a loan to fund its activities.
Organisations and other beneficiaries of rural enterprises 37 301

* the largest element of technical assistance, representing 17% of the total


amount of time spent on TA.
The activities of sidi and its partners in 2009  13
Ensuring the partners’
institutional viability and social purpose
The role of SIDI as a “patient” investor is to work along side the LFS in order to ensure that they are able to
provide long-term financial services. This means that SIDI has to support them in their process of
institutionalisation, in the use of tools to direct and to monitor their activities, in the definition of their strategic
priorities and, finally, to ensure their good governance. In structures in which SIDI is a shareholder, then it plays
an active part in governance bodies and has a say in the decisions that are taken to implement the general policy.

Taking part in the process tions in Senegal, on the basis of the JARINOO JANT BI ex-
of institutionalisation perience undertaken with the UGPM and the CREC in the
Mékhé region (cf. p. 9),
ASIENA in Burkina Faso, CGRH, CREC, JARINOO JANT • provision of support for the process designed to bring about
BI in Senegal, ANED in Bolivia, FONDS COOPERATIF in institutional change within the Fonds Coopératif in Laos in order
Laos, PALESTINE GUARANTEE FUND to respond to the constraints brought about by the changes
The work carried out by SIDI regarding institutionalisation is made to the legal framework in the country (cf. focus opposite)
designed to focus on two areas:
 the conversion of a project developed by a partner into an
independent structure, Reinforcing governance
 reflection upon the possibility of altering a partner’s legal As well as playing its role as an “active social investor”, SIDI
framework in order to respond to a specific problem (regar- also seeks to guarantee the smooth, long-term operation of
ding the way in which it operates, compliance with the law...). the partners, without impinging upon their social vision.
The aim is to ensure that the structure has the bases of a In order to achieve this aim, then first of all SIDI plays an ac-
long-term existence and a smooth form of operation, notably tive role on the 23 boards of directors of which it is a mem-
in its relations with its stakeholders: shareholders, workers, ber (when SIDI holds equity in an organisation then it
clients... systematically asks to be represented on that organisation’s
decision-making body): this means not only taking part in
In 2009, SIDI took part in ongoing work of this kind in seve- meetings but also in their preparation and being involved in the
ral areas, notably: work carried out to ensure that decisions are implemented
• reflection upon changing the statutes of ASIENA in Burkina correctly. In this context, SIDI is particularly anxious to ensure
(focus p. 9), that a good degree of coherency exists between the partners’
• the conversion of the Palestine Guarantee Fund, which has social vision and their effective practices.
thus far been managed by SIDI, into an institution governed Next, SIDI strives to ensure the smooth operation of the in-
by Palestinian law, the Refinancing and Guarantee Society, ternal decision-making bodies, notably through the provision
with the aim of serving all of the country’s MFIs (cf. p. 6), of support for the use of tools designed both to direct and to
• the creation of a social enterprise to provide energy solu- monitor activities. In 2009, SIDI organised numerous training

14  The activities of sidi and its partners in 2009


courses on the use of management tools for seven partners order to provide the enterprise with the means to resist the
in the Great Lakes area and also took part in the creation of considerable pressure it was being placed under by a coffee
a financial analysis chart within FECECAV in Togo. multinational that wanted to buy it.
Finally, SIDI has continued to closely monitor changes within SIPEM was created in Madagascar in 1990 by two founding
several structures so as to ensure that they maintain their so- shareholders, namely APEM, a Madagascan association, and
cial vocation, despite the fact that, in several cases, they have SIDI. SIDI holds 25.41% of SIPEM’s capital. The last time
made changes amongst their pool of investors. It has acqui- the capital was increased, through a process that concluded
red part of the shares held by CORDAID (Netherlands) in the in March 2009, SIDI kept its stake in SIPEM at the same level
Columbian cooperative CONSOLIDAR, so as to allow it to in order to maintain its strong social goals and to guarantee a
withdraw from its capital, whilst at the same time ensuring that clear vision for the members of staff.
the cooperative is able to strengthen its credit activity without
the fear of disrupting its governance. As part of its efforts to
support the SMF EA, a regional Ugandan investment fund,
which provides refinancing for the microfinance institutions in An original and evolving
the area (Uganda, Kenya, Tanzania and Sudan), SIDI has joi-
ned forces with the founding Norwegian shareholder, the financial structure:
STROMME Foundation, in order to seek out a new social in-
vestor. This expansion of the SMF EA’s pool of investors,
the Fonds Coopératif
which has been achieved through the inclusion of CORDAID in Laos
(which is going to contribute with one million euros in equity),
will serve to underpin its future development without calling In 1996, SIDI and the Association de Soutien au Développement des Sociétés
into question its initial vision (the economic and social well- Paysannes (ASDSP) launched the creation of credit unions in order to enable
being of its beneficiaries). Furthermore, SIDI also contributed small enterprises to access financing in Laos. These credit unions, which are pre-
to the capital increase of CAFEPERU (cf. p. 6), particularly in sent throughout Laos, are able to provide financial support for small production
units and, in particular, for small family-run enterprises, so that they can develop
their activities whilst at the same time conserving the natural and human envi-
ronment, as well as the traditional values of the multi-ethnic society in Laos: fair-
ness, solidarity and mutuality.
The Cooperative Fund was then set up in 2002 to strengthen the financial and
technical capacities of the network of these 13 member credit unions and to gua-
rantee the continued development of the project. Accordingly, the Fund provides
Social responsibility report
training and support for the creation of new credit unions, as well as financing
designed to increase the credit unions’ loan capacity. The Fund also provides di-
RISk rect support for several enterprises that operate in the environment of these co-
operatives (such as Lao Farmers Products, whose aim is to provide outlets for the
farmers, notably through the sale of fair trade products, mainly in Europe).
GOVERNANCE SUPPORT The network provides support for more than 1,300 small family enterprises en-
gaged in agriculture, livestock, small craft industry, distribution and services.
SIDI, which is a founding shareholder, holds 28% of the Cooperative Fund’s ca-
pital (in other words, €190,000) and has a seat on the Board of Directors. It also
LEVERAGE
EFFECT
ADAPTATION
RANGE OF SERVICES
provides the structure with a substantial amount of technical assistance.
In its capacity as a member of the board, in 2009 SIDI supported the change
made within the management in order to improve the decision-making process.
SIDI also approved calls made to alter the Fund’s legal structure. In fact, legis-
lation in Laos had changed, requiring each credit union that is a member of the
Fund to obtain bank accreditation in its own right or to become an agency of the
GOVERNANCE
 Number of partners with whom SIDI takes part
Fund, a solution that has been approved by the General Assembly. The Coope-
rative Fund’s team is now preparing the legal and operational implementation of
in strategic reflection 28 %
 Number of partners where SIDI is represented on the Board 23
this new organisation: the shares held by the credit unions will be transferred to
the ASDSP, which will be strengthened for this purpose, and the cooperatives
 Number of days devoted to governance 434 j themselves will be integrated within the Fund as agencies. SIDI is playing an ac-
Including 297 days spent participating in Board meetings tive role in this work, which will continue during 2010 and which will require a
 Number of days devoted to institutionalisation 85 j greater degree of both technical and political support.
Involving 10 partners

The activities of sidi and its partners in 2009  15


SIDI’s 2009
financial statements
SIDI’s balance sheet at December 31, 2009 in thousands of euro

ASSETS LIABILITIES
2009 2008 2009 2008

Net intangible assets 61 78 Capital 13,000 9,000


Net financial assets 8,674 8 978 Reserves 546 269
of which shares and claims 4,394 4 159 Profit/loss for the year 155 277
of which loans 4,103 4 634
of which other financial assets 176 185 Total equities 13,701 9,546

Total fixed assets 8,735 9 056 Provisions2 180 138  2


These are pro-
Loans 1,292 1,284 visions for risks and
financial provisions
Autres dettes 828 611 for exchange rate
losses.
Claims (net value, including co-financing) 383 545
Subscribed capital – capital increase - 546

 1 Cash (in- Cash assets 2,292  Provisions on loans


Shareholders, current account 128 149
1 3
9,295 5 302 F.I.D.3 - International guarantee fund 2,040
cluding F.I.D.), C.D.C. Fund 366 358 and equity investment
invested in have since 2004 been co-
ethical securi- vered by the F.I.D., a hed-
ties and invest- ging mechanism that
ment real Accruals 122 19 applies, with a few ex-
estate. TOTAL 18,535 14 922 TOTAL 18,535 14,922 ceptions, to all invest-
ment conducted by SIDI.
It comprises current ac-
"S.A. SOFIDEEC BAKER TILLY, external auditor, a member of CRCC in Paris, represented by its chairman counts of shareholders
Mr Fouad EL M'GHAZLI, has certified without reservations SIDI's annual accounts, ended December who are convinced of the
31, 2009." importance for SIDI to
target difficult interven-
tion areas.

The solidarity chain for financing Breakdown of SIDI’s capital at 31/12/09


1,300 shareholders 5,000 savers
FID Capital Income from the Joint Invest- Mobilisation of
13 million d’euros ment Fund and from CCFD funds from
1.2 million euros/year alliances Other 4 %

Northern Partners 5 %
Refinancing fund Technical CCFD-Terre Solidaire
Assistance fund French Financial 27%
Institutions 12%

PO PO
LFS LFS LFS LFS ESD - Épargne
Solidarité
Développement
29 % Sœurs
(Epargne Solidarité Auxiliatrices 17%
Développement -
Final beneficiaries grouping of 1200 Sœurs
individual shareholders) Ursulines
LFS: Local Financing Structures
PO: Producers’ Organisations de Jésus 6 %
FID: Development Incentive Fund (guarantee mechanism)

16  The activities of sidi and its partners in 2009


SIDI’s income statement
at December 31, 2009
in thousands of euro
This heading mainly comprises
• contributions received from the CCFD to finance support activities
au 31/12/2009 2008 (1,2 million euro). Most of these resources are provided to the CCFD from
Income Total 1,568 1,828 the proceeds of the Faim et Développement investment fund (€ 549,000
in 2009)

1,694  partners or are spent on financing SIDI support.


• resources from international partners, which are either transferred to the
Services (CCFD and additional income) 1,301
Other products and provision reversal 267 134  Other proceeds include fees for attending
board meetings, application fees, etc.

Charges Total 2,043 2,417


These are
Current operation income (of which technical operations in the amount of € 69,175 ) 722 832 co-financings from
international
Wages and salaries 1,147 1,140 partners transferred
Depreciation expense 20 19 directly to the
partners. These
Provision for charges - 14
 through SIDI.
funds only transit
Additional co-financings transferred to partners 154 412

Operating profit/loss -475 -589


Income Total 985 750
Mainly recovery Social responsibility report
Income from portfolio (loans and shares) 516 572 of provisions on
cash RISk
Income for current assets 54 29 investments,
DIF resources. 48 99 thanks to the
revival on the
Exchange rate gains 42 41
 markets.
financial GOVERNANCE SUPPORT
Provisions reversal 325 4
Other 0 5
Charges Total 339 763
LEVERAGE ADAPTATION
EFFECT RANGE OF SERVICES

Provision for financial risks, translation differential 5 5


Provision for risks on shares and loans - 480
Loan write-down 195 77 COM PLEM ENTARY DATA
 Percentage of partners in crisis areas
Interests on loans 30 26
31%
Disposal of shares, Investment securities 16 44 86% of which are in political crisis zones
Exchange rate losses 75 116  Percentage of partners who have reduced their interest
rates over the last 3 years 21%
 Financial data
Other 18 15

€ 492 million
Financial profit/loss 646 -13
Total MFI loan portfolio
Exceptional products 142 1,069 Total MFI savings portfolio € 333 million
Exceptional charges 158 190 Total amount of partners’ assets € 1MM
Exceptional profit/loss -16 879  Percentage of partners who have increased their equity 44%
Income taxes - -  Percentage of partners who have generated a positive result 52%
Net profit/loss 155 277  Percentage of partners who have a social policy 70%

The activities of sidi and its partners in 2009  17


RED FASCO
GUATEMALA FENACOOP
FONHSUD
INDEPCO
KNFP / IMOFOR
HAITI Map
NICARAGUA
of SIDI’s

FOROLACFR
Latin America
BANCOSOLIDARIO CONSOLIDAR
CORECAFE
FAPECAFES
GRUPPO SALINAS
MCCH
COLOMBIA
partners*
ECUADOR

CAFEPERU
in 2009
FOPEPRO CONFIANZA
Société de gestion ACEROLA CREDIFLORIDA
Andean Countries EDAPROSPO
FORTALECER
LA FLORIDA
PERU
ANED
FINRURAL
BOLIVIA

INDES
CHILE

SAINDESUR
URUGUAY

* and Southern networks

SEFEA
Europe
MICROINVEST
MOLDOVA

KRK
KOSOVO
FAIR TRADE LEBANON
ACAD
AL AMANA NAJDEH
ASALA
AMSSF LEBANON
Guarantee Fund
MOROCCO ANJCE PALESTINE
ALGERIA
CGRH NIANING ETC
CREC AOPP KOKARI EACD
ESCALES JAPPOO APIM MECREF EGYPT
JAPPOO DEVELOPPEMENT BMS SA SINERGI FONDS COOPERATIF
JARINOO JANT B JEMENI ADER TAANADI LAO FARMERS PRODUCTS
MEC PROPEM NIAKO ADER NIGER LAOS
UGIE SAPCA/EGAS MALI HIEP THAN
ASIENA
UGPM VIETNAM
FNGN BTEC FECECAV MAF AMRET
SENEGAL
CRG MOGTEDO MAPTO Asia HATTHA KAKSEKAR
FPFD BURKINA TIMPAC CAMBODIA
GUINEA UCMECS
WAGES
TOGO
Centenary bank
OMIPA
ADI-KIVU UGANDA
SMF EA CCRD
Central Africa COODEFI IMPUYAKI
DRC (DEMOCRATIC REPUBLIC OF CONGO) PREFED-RWANDA CAPAD
FEFISOL RWANDA COSPEC
Africa BURUNDI
AKIBA
RESEAU MAIN BIO SUSTAIN
Africa TANZANIA
CAIXAS COMUNITARIAS
UGC-CPC
MOZAMBIQUE
ADAPS MADAGASCAR
ALAOTRA/SILAC
PAMF
SIPEM
TITEM
MADAGASCAR

TEMBEKA
SOUTH AFRICA

18  The activities of sidi and its partners in 2009


SIDI’S PORTFOLIO
AT 31/12/09. IN THOU-
SANDS OF EURO (CAPITAL, VOLUME OF SUPPORT
AREA PARTNERS COUNTRY CATEGORY LOANS, GUARANTEES) IN TIME SPENT BY THE TEAM
Africa FNGN BTEC BURKINA MFIC **
ASIENA BURKINA MUSO ****
MOGTEDO BURKINA PO 22.9 **
COSPEC BURUNDI MFIC *
CAPAD BURUNDI MUSO ***
SMF EA Central Africa FUND 497.7 **** GOVERNANCE
COODEFI DRC MFIC 10.5 *
ADI-KIVU DRC MUSO *** AT JUNE 18, 2010
CCRD DRC MUSO 17.4 ****
CRG GUINEA MFIC 17.8 ****
FPFD GUINEA PO * BOARD OF DIRECTORS
PAMF MADAGASCAR MFIC 181.9 ***
TITEM MADAGASCAR MFIC ***
SIPEM MADAGASCAR MFIP 536.9 **** SCHMITZ Christian
ADAPS MADAGASCAR PO 20.6 **** Chairman of the Board of Directors
ALAOTRA/SILAC MADAGASCAR PO 100.0 **
JEMENI ADER MALI MFIC 38.1 *
NIAKO ADER MALI MFIC 45.7 * GUENARD Geneviève
APIM MALI NETWORK *
AOPP MALI PO *** Board Member
BMS SA MALI UMBRELLA 152.5 ****
CAIXAS COMUNITARIAS MOZAMBIQUE MFIC *
UGC-CPC MOZAMBIQUE MFIC **** RICARD Xavier
SINERGI NIGER FUND 22.9 ** Board Member
KOKARI NIGER MFIC 338.8 ***
MECREF NIGER MFIC **
TAANADI NIGER MFIC 348.7 ** SUPERVISORY BOARD
ETC NIGER PAVRA 1.5 *
IMPUYAKI RWANDA MUSO *
PREFED-RWANDA RWANDA MUSO *** AURENCHE Guy
CREC SENEGAL MFIC 174.8 ***
MEC PROPEM SENEGAL MFIC 160.1 ** Chairman
ESCALES JAPPOO SENEGAL PAVRA 286.3 ***
JAPPOO DEVELOPPEMENT SENEGAL PAVRA ****
JARINOO JANT BI SENEGAL PAVRA **** MESNY Philippe
CGRH NIANING SENEGAL PO 30.0 *** Vice-chairman
UGIE SAPCA/EGAS SENEGAL PO *
UGPM SENEGAL PO 72.4 ***
TEMBEKA SOUTH AFRICA UMBRELLA 380.9 *** CAISSE DES DEPOTS ET
AKIBA TANZANIA MFIP 419.6 ***
BIO SUSTAIN TANZANIA PAVRA 70.5 **** CONSIGNATIONS
FECECAV TOGO MFIC 83.8 *** Represented by
TIMPAC TOGO MFIC 19.1 **
UCMECS TOGO MFIC 5.5 ** CHABRILLAT Pascale
WAGES TOGO MFIP *
MAPTO TOGO PO **
OMIPA UGANDA MFIC *** CCFD - TERRE SOLIDAIRE
Centenary bank UGANDA MFIP 475.4 *
Latin America FOROLACFR Latin America NETWORK **
Represented by LESAY Martial
FOPEPRO Andean Countries FUND 68.5 ****
Société de gestion ACEROLA Andean Countries OTHERS 1.7 ****
ANED BOLIVIA MFIP 142.8 **
CONGREGATION DES
FINRURAL BOLIVIA FUND *** SŒURS AUXILIATRICES
INDES CHILE MFIP 85.1 **
CONSOLIDAR COLOMBIA MFIC 78.8 ***
Represented by
BANCOSOLIDARIO ECUADOR MFIP 165.4 * Sister Marie-Thérèse GAUD
CORECAFE ECUADOR PAVRA 14.0 *
FAPECAFES ECUADOR PAVRA 152.2 **
GRUPPO SALINAS ECUADOR PAVRA ** CONGREGATION DES
MCCH ECUADOR PAVRA *
RED FASCO GUATEMALA UMBRELLA 164.9 ****
URSULINES DE JESUS
FENACOOP NICARAGUA UMBRELLA 140.1 ** Represented by
CAFEPERU PERU PAVRA 344.1 **
CONFIANZA PERU MFIP 142.0 *
Sister Christiane GROSSIN
CREDIFLORIDA PERU MFIC 67.9 **
EDAPROSPO PERU MFIC *
FORTALECER PERU UMBRELLA 180.0 ***
CREDIT COOPERATIF
LA FLORIDA PERU PO **** Represented by MORET Laurence
SAINDESUR URUGUAY MFIC 108.7 **
Asia MAF Asia FUND *
AMRET CAMBODIA MFIP 290.8 * EPARGNE SOLIDARITE
HATTHA KAKSEKAR CAMBODIA MFIP 238.1 ****
FONDS COOPERATIF LAOS MFIC 190.1 ****
DEVELOPPEMENT
LAO FARMERS PRODUCTS LAOS PAVRA 73.7 ** Represented by
HIEP THAN VIETNAM PAVRA 23.1 ***
Medit. Basin ANJCE ALGERIA OTHERS ***
DEQUEKER Guy
EACD EGYPT MFIC 264.4 *
FAIR TRADE LEBANON LEBANON PAVRA 59.0 **
NAJDEH LEBANON MFIC 28.1 *
BITSCH Gérard
AL AMANA MOROCCO MFIP 245.6 *** Member
AMSSF MOROCCO MFIC **
ACAD PALESTINE MFIC 101.3 ***
ASALA PALESTINE MFIC 72.3 *
Palestine Guarantee Fund PALESTINE FUND 99.0 ***
Caribbean FONHSUD HAITI MUSO 37.4 ****
INDEPCO HAITI PAVRA 67.6 *
KNFP / IMOFOR HAITI NETWORK ****
Europe SEFEA Europe FUND 135.0 **
KRK KOSOVO MFIP 948.6 ****
MICROINVEST MOLDOVA MFIP 129.3 ****
TOTAL 9 441.9

The activities of sidi and its partners in 2009  19


The portfolio is invested as follows: 45% in equity capital, 45% in loans and 10% in guarantees.
For further information, see www.sidi.fr
© 2010 - Printed in France on recycled paper with vegetable ink.

INTERNATIONAL
SOLIDARITY FOR
DEVELOPMENT AND INVESTMENT

12 rue Guy de la Brosse


75005 Paris - France
tél. : 33(1)40 46 70 00
fax : 33(1) 46 34 81 18
info@sidi.fr

www.sidi.fr