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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
A brief guide to SIDI The Solidarity Chain for Financing provides double support
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
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.
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
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%
RISk
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:
© 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,
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
ASSETS LIABILITIES
2009 2008 2009 2008
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)
€ 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%
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
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
INTERNATIONAL
SOLIDARITY FOR
DEVELOPMENT AND INVESTMENT
www.sidi.fr