SIDI - Annual Report 2009

Embed Size (px)

Citation preview

  • 8/8/2019 SIDI - Annual Report 2009

    1/20

    09The activitiesof sidiand its partners20INTERNATIONALSOLIDARITYFOR DEVELOPMENTAND INVESTMENT

  • 8/8/2019 SIDI - Annual Report 2009

    2/20

    A brief guide toSIDI

    Glossary

    Reviewofthe workcarried out in2009Solidarity 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

    The Solidarity Chain for Financing provides double support

    SharingtherisksadequatelyandpatientlyInvesting in partners equity

    Lending in local currency

    Activities in crisis zones

    Providing accessibleandflexible supportPromoting socialdimension follow-up

    Getting involved in institutions development

    Adapting therangeofservicesto the local contextSSupportingproducers organisations

    Promotingvalue-added in rural areas

    Promotingsolidarity credit unions

    Meeting training needs

    Creating supportmechanismsInvesting in refinancing instruments

    Networkingandcollaboratingwith other alliances

    Ensuring thepartners institutional viabilityandsocialpurpose

    Taking part in theprocess of institutionalisationReinforcinggovernance

    Financial Statements

    Mapsand List ofpartnerships

    14

    10

    18

    16

    12

    2

    8

    6

    2

    4

    TableofContents

    ACP: Africa, Caribbean, Pacific

    CEECs: Central and Eastern European Countries

    ESD: Epargne Solidarit Dveloppement, grouping of SIDIs

    individual shareholders

    EU: European Union

    JIF: Joint investment Fund

    LFS: Local Financial Services

    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

    accompanied by financial contributions from other public or private

    sources.

    MUSO: Solidarity Credit Union

    PO: Producers' Organisation

    PAVRA: Promotion of Added Value in Rural Areas

    PARMEC: Programme supporting the regulation of Solidarity Credit

    Unions

    SCF: Solidarity Chain for Financing

    SMEs: Small and Medium-sized Enterprises

    TA: Technical Assistance

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

    support MFI

    A brief guide to SIDISIDI, International Solidarity for Development and Investment, is asocial investor that falls under the category of solidarity company. It wascreated in 1983 by a development NGO, CCFD -Terre Solidaire. SIDI pro-motes a social and solidarity economy via the development of individualand collective economic activities, which are initiated locally, in the coun-

    tries of the South.

    Its activity consists of giving financial and technical support to its partners,the Local Financing Services (LFS), which provide financial services tai-lored to groups excluded from traditional banking circuits. SIDI also sup-ports initiatives designed to increase the income of small rural producers.SIDIs goal is to promote the development of these structures in order toguarantee the sustainability of services, such as savings, loans, training,market access and the sharing of risk, that SIDI provides to their benefi-ciaries and to contribute to development.

    SIDI backs its partners via two additional means:

    By offering tailored technical support to overcome problems relatingto governance, strategy, management, training, diversification, net-working, etc.

    By increasing their financial resources, in the form of equity financing,loans, guarantees and searches for additional resources from interna-tional institutions.

    In 2009, SIDIs capital was invested in 65 partners in 29 countries; itssupport and consultancy budget for partners amounted to 1.48 millioneuros.Its activities, managed by a team of 11 desk officers, assisted by 15 vo-

    lunteer experts, are intended to generate social value-added in order tofurther the wellbeing of populations in a sustainable way.

    SIDI is active in solidarity financing as well as mobilising individualsand institutions in the North who choose to give SIDI the financialmeans to carry through its actions without setting as a priority a finan-cial return but rather a human, social and environmental return. There-fore, SIDIs shareholders take a share of the risk borne by theinstitutions in the South in order to offer access to high-quality financialservices. Furthermore, savers in the Faim et Dveloppement mutual in-vestment fund share their proceeds to enable SIDI to provide locals

    with accessible technical support.This Solidarity Chain for Financing enables SIDI to take sustainable ac-tion with its partners without the fear of innovation-related risks, so as topromote their self-sufficiency.

    INTERNATIONALSOLIDARITY FORDEVELOPMENT ANDINVESTMENT

    www.sidi.fr

    Glos

    sary

    The activities of sidi and its partners in 20092

  • 8/8/2019 SIDI - Annual Report 2009

    3/20

  • 8/8/2019 SIDI - Annual Report 2009

    4/20

    Review of the workcarried out in 2009

    As a result of the financial crisis that started in 2008, growththroughout the world slowed sharply in 2009; in Africa growthwas only one-fifth of that recorded in previous periods. Thesituation was particularly onerous in the poorest of thedeveloping countries. The crisis, accompanied by high food prices,had a negative impact on MFI customers who encounter evergreater difficulties in repaying their loans and some are strugglingwith excessive debt. The portfolio risk of local financing

    structures (LFS) often increased. Nevertheless, SIDI reasserted therelevance of North-South financial solidarity and pursued its workwith its partners MFIs, socially responsible companies andproducers organisations in order to take up the challenge offinding financial services that are tailored to the needs of theirmembers or customers and to todays difficult economic andsocial context.

    Figure 1 - Destination by

    region of the portfolio

    in 2009

    Figure 2 - Destination

    by type of investment

    The activities of sidi and its partners in 2009

    Solidarity financingin 2009

    Under its strategic plan, SIDI devoted the bulk of itsinvestment to structures operating in rural areas,mainly in Africa.

    A portfolio of 9.4 million euros, invested

    in 65 partners in 29 countries

    At 31 December 2009, SIDI held a portfolio of 9.4 million

    euros, a slight increase of 1.54% over 2008. Disinvest-ment over the year, amounting to two million euros (simi-lar to 2008), was in line with forecasts. On the other hand,the 2.2 million euros of new commitments accounts for81% of planned spending. This is explained by the factthat investments in two funds, FEFISOL and FOPEPRO,were carried forward to 2010 (see page 12).

    Ten new partners received financial support in 2009.These are the investment fund for the Andean countries,FOPEPRO; the management company in Latin American,ACEROLA; the MAIN network in Africa; the INDEPCO tai-lors federation in Haiti; the MFIs ASALA in Palestine and

    PAMF in Madagascar; the fishermens association CGRHin Senegal; the companies BIOSUSTAIN in Tanzania, HIEPTHAN in Vietnam; and ETC and SINERGI in Niger. Thesepartnerships account for one fourth of SIDIs investmentsover the year, the remainder being devoted to strengthe-ning support for existing partners, mainly SIPEM in Mada-gascar; CAFEPERU in Peru (in order to be in step withtheir capital increase); ESCALES JAPPOO in Senegal; andTAANADI and KOKARI in Niger via the granting of local fi-nancing guarantees for the development of their portfo-lios. Lastly, seven loans that came due were renewed.

    Furthermore, SIDI recovered all the invested capital thathad fallen due in the Southeast Asia investment fund,MAF; this was the only withdrawal of the year.The average investment per partner amounts to 145,000euros.

    Investment in line with goals

    Of all the 24 partners who received financial support in2009, 20 operate in rural areas. At the end of the ac-counting period, support for rural areas made up 62% ofthe portfolio, in accordance with SIDIs goals (agricultureand fisheries accounted for 36%). In addition, 48% of theportfolio is invested in Sub-Saharan Africa, compared to43% in 2008 (see figure 1).

    SIDI seeks to contribute, to the extent possible, stable re-

    sources that provide solidarity to its partners. To that end,its portfolio was invested as follows: 60% in local currency (56% in 2008), which relievedpartners from exchange rate risks (see figure 2); 45% in equity financing (43% in 2008), which is thetype of investment that is the most supportive and durable(see figure 2).

    The risk inherent in these investments, along with SIDIsactivities in crisis zones (see the social responsibility re-port, p. 7), must not compromise SIDIs capacity to providesustainable services to its partners. That is why SIDI strivesto lessen the risk in the following ways:

    Forty-one percent of the portfolio is invested in MFIswith strong economic and social potential, five of whichpay dividends; 21% is invested in funds and umbrella or-ganisations that are lower-risk partners that provide localleverage (see figure 3).

    No single country in which SIDI intervenes accountsfor more than 11% of the portfolio and no partner receivesmore than 5% of investments, with the exception of KRKin Kosovo. KRK received a loan of 700,000 euros grantedvia SIDI by the Faim et Dveloppement mutual fund. In-

    deed, part of the outstanding balance of this fund financesentities that have been granted the label solidarity com-pany, such as SIDI.

    CEECs

    9 %

    Africa

    48%Latin America

    20%

    diterranean

    Basin 9 %

    Asia

    13 %

    Caribbean

    1 %

    uity financing

    ard currencies

    9%

    oans in hard

    currencies

    21% Loans in local currencies

    23%

    Guarantee

    10 %Equity financing

    in local currencies

    37%

    4

  • 8/8/2019 SIDI - Annual Report 2009

    5/20The activities of sidi and its partners in 2009 5

    Solidarity in 2009

    SIDI supported 92 partners in 33 countries in 2009. Moreparticularly, its technical assistance provided to 65 financialpartners enabled SIDI to reduce significantly risks to its ca-pital. As a result SIDI has in-depth knowledge of their acti-vities, their context and their socio-economic situation andis in a position to work with them to overcome their diffi-

    culties.

    Support that solves partners problems

    Apart from monitoring the structures in which it invests, SIDIalso provides technical assistance services to its partners sothat they may develop, improve and continue to provide ser-vices into the future.In 2009, this support, provided by the internal team assistedby 15 volunteers, experts from financial circles, banks andcompanies, was equal to 2,222 days of work i.e., on average24 days per partner.This support mainly consisted of technical assistance ser-

    vices during field missions and covered the following subjectareas: long-term viability problems in areas such as gover-nance, strategy, innovation and institutionalisation, 21% internal organisation i.e. accountancy, IT systems,human resources and training, 13% negotiations for additional resources from public orprivate bodies, 10% analysis of the portfolio and products, 8% reflection on social value-added, 4.5%.The additional time was devoted to identifying new part-ners and creating two investment funds for the Andean re-gion and Africa (22%), to participating on the boards of

    directors of which SIDI is a member (13%) and to keepingan eye on SIDIs portfolio i.e., loans and equity financing(8%). Lastly, employees and volunteers spent 832 addi-tional days on horizontal themes, essentially focusing onstrategy, organisation, SIDI alliances and on subjects re-quiring a common reflection to define a SIDI approach,such as the Social Viability process (p. 8), the support forsolidarity credit unions, the reflection on Fair Trade and thepromotion of value-added in rural areas (p. 10).

    This work required a budget of 1.48 million euros equalto 72% of SIDIs operating expenses, the rest being taken

    up by headquarters expenses which is 16% less thanthe previous year. This decrease is explained by a fall insupport grants to partners and by the time and energy de-voted to the creation of the regional investment funds FE-FISOL and FOPEPRO.

    Sixty-four percent of this support and advice time was de-voted to SIDIs African partners, which confirmed SIDIscommitment to this continent. Half of the time was spenton partners undergoing development and those in ruralareas.

    The Solidarity Chain for Financing pro-

    vides double support

    Support for SIDIs partners enables them to benefit froma la carte backing in many areas (see above) and it is pro-vided cost-free to the partners. SIDIs economy is foundedon a Solidarity Chain for Financing (fig. page 16), whichserves to mobilise funds in the North and support partnersin the South in the following ways: First, CCFD-Terre Solidaire financed SIDIs technicalassistance mission to the tune of 1.2 million euros, whichaccounts for 80% of support grants, in particular thanks tothe shared income from the Faim & Dveloppement mu-tual fund that in 2009 amounted to 549,000 euros. Next, SIDI successfully negotiated with six donors the

    amount of 116,000 euros in cofinancing for the benefit offour partners who support small rural producers (see p.12).SIDIs other income is generated by the following invest-ment activities, among others: The SIDI portfolio (loans and equity financing) gene-rated income of 496,000 euros in 2009. In that connec-tion, the collection of interest from loans increased by 69%over the year, which nearly made up for the fall in the num-ber of structures distributing dividends in 2009. Income of 320,000 euros from the cash account,thanks to the recent recovery on the financial markets.Financing of SIDIs partners is guaranteed for the four

    years of the strategic plan, 2009-2012, thanks to the 4-million euro capital increase decided in mid-2009. At thattime the shareholders, in particular individuals, mobilisedand increased their numbers from 820 to nearly 1,200members (see figure, p. 16).

    As a result of extensive work over the past four years,which was stepped up in 2009 in order to mobilise seve-ral institutional investors, we expect 2010 to mark thestart-up of the two investment funds.

    FEFISOL and FOPEPRO will enable SIDI, which created

    these two funds along with Alterfin/Belgium and Eti-mos/Italy, to achieve significant leverage effect and gene-rate an expected 60 million euros by the end of 2012.

    Figure 3 - Destination by

    category of the portfolio

    MFIP10 %

    MFIC 18%

    PAVRA13 %

    Funds19 %

    PO 9%

    Network 7 %Others 3 %

    MUSO 10 %

    Figure 4 - Destination of TA

    days by region in 2009

    Eastern Europe 4 %

    Africa

    64%

    Latin

    America

    16%

    Mediterranean

    Basin 5 %Asia 7 %

    Caribbean 4 %

    Figure 5 - Destination

    by approach

    MFIP39 %

    MFIC24 %

    PAVRA12 %

    Funds9 %

    UMBRELLA11 %

    PO3 %

    Network1 % MUSO

    1 %

    UMBRELLA

    11 %

  • 8/8/2019 SIDI - Annual Report 2009

    6/20The activities of sidi and its partners in 2009

    Sharing risks fairlyand patiently

    One of SIDIsdistinguishing traits isthat its shareholdersagree that its capital

    should be invested inits partners in a

    supportive way, whichenables SIDI to offersustainable and low-

    cost resources as well

    as to share some ofthe risk with them.

    Investing in

    partners equitySIPEM in Madagascar, SINERGI and ETC in Niger, CA-FEPERU in Peru and ESCALES JAPPOO in Senegal

    Acquiring a stake in the capital of local financing structuresis SIDIs preferred means of intervention because it provides

    sustainable and low-cost development of their activities. In-deed SIDI encourages limited dividends until the institutionhas reached significant financial autonomy. At the end of2009, 45% of SIDIs portfolio was invested in equity finan-cing.During the year, SIDI invested in SIPEMs capital in order tomaintain its commitment in a context beset by several majordifficulties, such as the development of competition, deve-lopment of new products and a political crisis. It also step-ped up its stake in ESCALES JAPPOO, a small chain ofsolidarity restaurants that is struggling with the tourism crisisin Senegal. SIDI invested as well in the capital of two struc-

    tures in Niger, enabling it to finance agricultural processing(see inset opposite) and in Peru, SIDI contributed to CAFE-PERUs capital increase in order to back the development ofthis group of six coffee producer co-ops, which offers to itsmember shareholders, and to other co-ops, marketing, fi-nancial and technical assistance services. In particular, thesefunds will enable the company to borrow locally under betterterms.At the end of 2009, SIDI held shares in 28 structures, inwhich its average investment was less than 20% of the ca-pital, in line with its aim to be a significant but minority sha-reholder in such structures.

    Lending in local currencyMOGTEDO in Burkina Faso, FECECAV in Togo, FPFJ inGuinea, CGRH in Senegal and HIEP THAN in Vietnam

    While local financing structures in the South now manage toborrow on financial markets more easily, thanks in part to thesolid progress of microfinance development funds, theseloans are mainly granted in euros or dollars, which protectsthe lender from exchange rate risks but requires the local fi-nancial structures, and their beneficiaries, to shoulder the risk.SIDI wants to share this risk and that is why it has set up a

    2-million euro guarantee fund, called the Development In-centive Fund, whose income covers risks of exchange ratelosses. As a result, 42% of loans and guarantees are deno-minated in local currencies.

    In 2009, SIDI lent 25 million CFA francs (38,000 euros) toFECECAV in Togo, on top of the 50 million CFA francs lentin 2008, to support the development of its rural activities, inparticular agricultural financing.

    SIDI also rolled over two loans for the purchase of inputsgranted to the MOGTEDO rice farmers co-op in BurkinaFaso (15 million CFA francs 23,000 euros) and to the F-

    dration des Paysans du Fouta Djalon in Guinea (126 millionCFA francs 193,000 euros).And SIDI extended a loan to the Nianing Fisheries ResourcesManagement Committee in Senegal in order to finance asolar fish dehydrator with the aim of preserving fishery pro-ducts over a longer period of time.Lastly, SIDI granted a 619 million dong loan (23,000 euros)to HIEP THAN, a rural company in the north of Vietnam, tofinance investment in a tea processing unit (p. 10).

    Activities in crisis zonesSIDI is pursuing its commitment to partners in countrieswhere political tensions run high, such as Palestine, Gui-nea, Niger, Madagascar, the region of the African GreatLakes and in areas suffering from natural disasters, suchas Haiti. The challenge is to be part of the development ofsustainable financial services in a difficult context thatmakes these services all the more necessary.

    In Palestine, the mechanism used to cover contextual risk,set up at the start of 2008 with European supporters forthe benefit of ACAD, has helped it to resume its lendingactivities that had been suspended because of occupa-

    tion-related risks. The financial support negotiated by SIDIwith the AFD was crucial to enabling ACAD to consolidateand expand its activities. At the start of 2009, ACAD un-veiled its risk-coverage mechanism to the association ofPalestinian MFIs, SHARAKEH. Once SHARAKEH confir-med that all the members were indeed implicated in thisproblem, it commissioned SIDI to study the ways andmeans of institutionalising this mechanism. SIDI and SHA-RAKEH are examining the creation of the Refinancing andGuarantee Society, of which they will be the founding sha-reholders. Since 2008, SIDI has been giving financial sup-port to ASALA, the Palestinian microfinance organisation

    for women, via a five-year loan of 100,000 dollars. Thisloan outstanding was doubled in 2009 in order to providebacking for the growth of the ASALA.

    6

  • 8/8/2019 SIDI - Annual Report 2009

    7/20The activities of sidi and its partners in 2009 7

    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 onbehalf of which it negotiates orders from the state, mainlyfor school uniforms and satchels, as well as from compa-nies. Because it groups the production capacity of itsmembers, 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 assistanceservices. At the end of the year, SIDI lent 100,000 dollarsto INDEPCO to develop its activity as wholesale purcha-ser of raw materials on behalf of i ts members.

    Locally financing the promotion

    of value-added in rural areas:ETC/SINERGI

    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 agreater impact on the financing of agricultural production and processing, SIDIidentified in 2009 two new structures with which it has set up a unique part-nership:

    SIDI acquired a 5% stake in the capital of SINERGI, a local private equityfirm that seeks to support the countrys formal and informal very small, smalland medium sized companies and whose role is to provide not only funds but

    in addition personalised support to entrepreneurs. Thanks to its participation onthe 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-mey, ETC-Crales, that collects, transports and processes cereals (flour andpre-cooked couscous) and then markets them wholesale and in chain stores.In particular, the formalisation of the structure, which was accomplished thanksto the availability of capital from SIDI and SINERGI, has enabled ETC-Cralesto set up a cereals processing shop.

    This tripartite arrangement enabled SIDI to support an initiative that enhancesagricultural activities, an experience that could be repeated elsewhere, and towork directly with SINERGI on an activity that promotes agricultural invest-

    ment. The end goal was to boost support to SINERGI in order to help, via theleverage effect, the countrys agricultural processing initiatives and to identifyamong the customers of KOKARI and TAANADI those able to benefit from thesupport of SINERGI.

    Social responsibility report

    SUPPORTGOVERNANCE

    ADAPTATION

    RANGE OF SERVICES

    LEVERAGE

    EFFECT

    RISK

    Share of the portfolio in local currency 60 % Share of the portfolio in equity financing 45 % Share of the portfolio in crisis zones* 24 % Share of the portfolio in Sub-Saharan Africa 49 % Share of the portfolio for financing rural areas** 62 % Share of the portfolio for financing agricultural

    and fishing activities** 36 % Share of the portfolio for financing developing institutions 57 %

    > 71% of the total number of financial partners

    * Political conflicts or natural disasters Countries in crisis: Guatemala,Haiti, Niger, Madagascar, Palestine, Guinea, Colombia, DRC and Leba-

    non.

    ** Financing for rural areas is exposed to greater risks owing to local cha-racteristics, in particular farming activities and fishing, which are subject tohighly unpredictable external factors that increase the risk of financing, suchas input price variations (fuel, fertilizer, seeds, etc.), risk of agriculture di-sasters (drought, locusts, etc.) as well as fluctuations in sale prices.

    RISk

  • 8/8/2019 SIDI - Annual Report 2009

    8/20The activities of sidi and its partners in 2009

    Promoting social dimen-sion follow-up

    RED FASCO in Guatemala, CAC la FLORIDA and FOR-TALECER in Peru, BMS in Mali, MAIN in Africa and HKLin Cambodia

    SIDI gives priority to partnerships that have structures witha strong social vision. Providing financial and non-financial

    services must not be an end in itself, but rather a means tocontribute to the wellbeing of the beneficiary populations. Itis therefore important to bring this social vision into line withtheir practices on the ground. That is what the Social Viabi-lity initiative, started in 2001 by SIDI, is all about. It has ledto a common approach for backing partners in their advan-cement of the social dimension.In 2009, the operational staff devoted a great deal of effortto this theme. Each desk officer got involved via internal trai-ning and SIDI redefined the social dimension of its servicesin the following way:

    by supporting partners definition and clarification of

    their social goals; by setting out a work plan in keeping with these goals; by supporting them in their application of this plan andproviding follow-up.

    SIDI wants to gradually lead all its partners along this pathby providing technical support to them without doing all thework itself. What is most important is that each partnershould seize on the advantages of supervising the social di-mension, which enables them to measure the sustainableimprovements in the beneficiaries wellbeing.

    Above and beyond this teamwork, the following initiativeswith the partners achieved progress in 2009: SIDI, along with RED FASCO, a financial instrument ofMaya community organisations in Guatemala, organisedtwo social dimension workshops and negotiated resources

    for covering the costs of related assistance. RED FASCOdefined the criteria and indicators that it wishes to pursueand set the conditions for their measurement. Work is advancing with CAC la Florida in Peru, whichplaces social concerns at the heart of its strategy. In 2009,this coffee growers co-op finalised a study on the vulnera-bility of its members, whose capitalisation, carried out bySIDI, brought to light the sustainable social changes in fa-milies as a result of the resources set in motion. The out-come of this capitalisation will enable SIDI to systematise

    the tool used to measure vulnerability, which may then beoffered to other partners, for example in Peru, where CAC laFlorida unveiled it to its partners in CAFEPERU. MAIN, the association of African MFIs, introduced in2009, with the help of SIDI, the social dimension in its di-ploma training scheme that is offered to managers in themicrofinance sector at the UCAC University in Yaound andthe UMU University in Kampala.

    Getting involved in

    institutions developmentSIDIs priority is to work with institutions that need significantand sizeable support. Such is the thrust of the Solidarity Chainfor Financing, which provides sustainable technical assistanceservices. In that connection, most of SIDIs partners are deve-loping institutions, i.e. with one or more of the following charac-teristics:1. A level of development activities that has not attained pro-fitability yet;2. A necessary and sustainable level of technical assistance;3. A potential for institutional development and growth in the

    identified activity;4. In certain cases, an economic, social and/or political contextthat objectively hampers the institutions development.Consequently, SIDI focuses its efforts on the long-term viabilityof its partners.

    Providing accessibleand flexible support

    8

    SIDI strives to respond in an individualised way to its partnersexpectations. It tailors its services and the volume of its support toeach partners identified needs (social responsibility report, p. 9).

    In addition, SIDI uses donations from the Solidarity Chain for Financing,including the shared income from the Faim & Dveloppement mutualfund, to adapt its financial terms and conditions to local requirementsand contexts, offering highly-appreciated and useful technicalassistance.

    Lastly, the duration of the partnerships that SIDI offers is not limited inadvance, which helps it to understand better the context in which it isintervening, to built a relationship of trust with its partners and toappreciate and promote its partners value-added in their relationshipswith their beneficiaries. In 2009, this support activity (detailed onp. 5) focused on partners in difficulty. Moreover, SIDI set up a newapproach strategy to supervise the social dimension of its partners.Finally, some partners have benefited from enhanced support for theirlong-term development (strategy and institutionalisation) and trainingfor their staff and managers.

  • 8/8/2019 SIDI - Annual Report 2009

    9/20The activities of sidi and its partners in 2009 9

    In 2009, SIDI began long-term work on development prospectswith ASIENA in Burkina Faso (see inset opposite). Furthermore,SIDI assisted in the strategic planning of UGC-CPC in Mo-zambique (PO network), of CREC in Senegal and CAC la Flo-rida in Peru.

    SIDI has devoted considerable resources to a thorough eva-luation of the Jarinoo Jant Bi rural electrification programmethat was launched in 2006 by UGPM in Senegal. This pro-gramme enables farmers in the area, thanks to an innovative

    system of loans, to acquire solar photovoltaic equipment. Via amonthly payment similar to the cost of non-renewable energy(candles, petrol, batteries, etc.) they gain access to electricity for

    lighting and small-scale income-generating items and activities,such as a freezer, market gardening with pumped water, re-charging mobile phones, etc. The success of this initiative, fi-nanced by SIDI in partnership with the Midi-Pyrnes RegionalCouncil and Frres des Hommes Italy along with UGPM, maywell lead to the provision of autonomous energy solutions inSenegals rural areas. The evaluation, as well as a market study,was conducted in 2009 with the idea of drawing up a businessplan to attract potential investors.

    Backing for ASIENA in Burkina Faso:

    assuring medium- and long-termviabilityASIENA is an association that brings together most of the womens religiouscongregations in the country. It is developing a health insurance programme forits members, a savings and loan programme for the population and since 2006has been supervising the creation, monitoring and refinancing of solidarity cre-dit unions in the southwest of the country. SIDI, along with ASIENA, steppedin to provide help at the request of CCFD-Terre Solidaire. In the wake of diffi-

    culties encountered in granting individual loans and after careful considerationand tests, ASIENA decided to work with the solidarity credit union tool.

    Together with the development of these programmes, a need arose in 2008 tostrengthen ASIENAs organisation. This was the focus of the considerable tech-nical assistance provided to the association in 2009 by the desk officer and avolunteer consultant. The support missions centred on the following:

    the preparation of a 3-year business plan with the management, an exer-cise which also served to train the management; training for the team in how to use the tool for supervising the activities ofsolidarity credit unions, to which SIDI also invited representatives of AOPP inMali to exchange experiences; an examination of a new law on microfinance, the PARMEC law in the CFAfranc 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-tions by-laws, on the problems of solidarity credit union representation, com-pliance with the PARMEC law and facilitated access to external finance.Today, ASIENA has shored up its viability. Its activities are expanding and localstaff has been hired. But the work must continue, the solidarity credit unionsnetwork must grow and the following considerations must be examined:- adaptation of its legal status to savings and loan activities;- the advisability of a more formal association with the solidarity credit

    unions;

    - a relevant lay/religious coordination at all levels (board of directors,management and activities).Under an agreement now being prepared by the two partners, SIDI will assistASIENA in making a success of all these initiatives.

    SUPPORT Total number of days of support (including 23%volunteer consultancy) * 2 222 days Percentage of days devoted to technical assistance 56% Percentage of technical assistancefor partner beneficiaries 53% Percentage of days devoted to technical assistancefor developing partners 86% Percentage of days devoted to technical assistancein the field in support of the social dimension 8% Number of days devoted to horizontal reflection,including 90days on social value-added 529 days Average length of partnerships (current) 7 years Average length of financial relationshipswith partners (current)** 6 years

    * While all LFSs are monitored, SIDI nevertheless adapts its technicalassistance services to their needs. Only half the partners benefit from tech-nical assistance, which is focused on structures that are in the develop-ment phase.

    ** The average partnership lifetime is quite long and is a good illustrationof SIDIs strategy of promoting fledgling or developing LSFs in order toback 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-more, financial support is delivered on average one year after the start of thepartnership, which confirms SIDIs wish to build first and foremost a rela-tionship of trust.

    Social responsibility report

    GOVERNANCE

    ADAPTATION

    RANGE OF SERVICES

    LEVERAGE

    EFFECT

    RISk

    SUPPORT

  • 8/8/2019 SIDI - Annual Report 2009

    10/20The activities of sidi and its partners in 2009

    Supportingproducers organisation

    MOGTEDO in Burkina Faso, FPFD in Guinea, ADAPSand ALAOTRA/SILAC in Madagascar, AOPP in Mali,CGRH and UGPM in Senegal, MAPTO in Togo and CACla FLORIDA in PeruIn rural areas, and in the particular case of farmers, lending isa risky business (see social responsibility report, p. 7). Never-

    theless, there is a great need for financing especially in pro-ductive investments. SIDIs approach consists of workingmainly with farmers organisations that are able to take on col-lective projects that benefit their members in a sustainableway.For example, SIDI renewed its seasonal credit to the Fdra-tion des Paysans du Fouta Djalon in Guinea, enabling it to buycertified potato seeds and adapted inputs; the loan was re-paid at the end of the season. SIDI is continuing its support tothe Mogtedo rice growers co-op in Burkina Faso so that it canbuy fertilizers. It also renewed its guarantee to ADAPS in Ma-dagascar, which will give it access to financing of 20,000 euros

    from a local bank to be used to pay cocoa growers upon de-livery. Finally it continued its commitment to UGPM in Sene-gal in the following three areas: financing for solidarity creditunions, financial and technical support for the programme thatbacks family holdings and the advancement of the JARINOOJANT BI rural electrification project (see p. 9).

    Promoting value-added inrural areas

    CORECAFE, FAPECAFES, GRUPPO SALINAS and

    MCCH in Ecuador, INDEPCO in Haiti, LFP in Laos, FTL inLebanon, ETC and SINERGI in Niger, CAFEPERU inPeru, BIOSUSTAIN in Tanzania and HIEP THAN in Viet-namA recurring problem for producers in the South is their lowcapacity to gain benefit from their own production. Farmerssuffer from raw materials price instability and have diffi-culty finding outlets. As a result, it is a challenge to bringabout lasting change only through the contribution of fi-nancial services because an increase in production will notalways mean a similar increase in revenue. That is why SIDIdecided to work on the Promotion of Value-added in Rural

    Areas, known by its French initials, PVAR. It specifically tar-gets producers organisations and businesses working withrural areas to develop their processing and marketing ca-pacities in an environmentally-friendly way. More specifi-cally, SIDIs support seeks to do the following:

    Adapting the range of servicesto the local context

    While microfinance iswell developedaround the world,with about 150 millionbeneficiaries, it is stilloften limited to theleast risky zones andsectors. For example,around 80% of thebeneficiaries of

    microfinanceinstitutions are locatedin urban areas.Moreover, customerswant products that aremore in tune withtheir needs, such aslonger-term and largerloans, in addition tosavings products.Lastly, conventionalmicrofinance is rarely

    able to fulfil therequirementsexpressed by verysmall, small andmedium sizedenterprises andfarmers organisations,which seek financingfor their productiveinvestments. For thatreason, SIDI is workingwith its partners onfinancial solutions that

    meet these needs. Inrural areas, SIDIfavours innovativeapproaches withpartners, such asproducersorganisations,companies, solidaritycredit unions andothers, who lookbeyond theconventional

    microfinance field.

    10

    Identify quality importers, such as organic and fair trade net-works, among others, that may be interested in products, intro-duce them to producers and support their relationship; Conduct searches for subsidies for organic conversion or cer-tification and grant pre-financing; Support agricultural processing projects; Back producers who create financial services for their mem-bers or who bring them into contact with MFIs (Madagascar, Mo-rocco, Lebanon, Tanzania and others).

    In 2009, SIDI initiated or pursued the following partner-ships along these lines: In Niger, with ETC and SINERGI, to support cereals pro-cessing (see inset p. 7). In Tanzania, with BIOSUSTAIN, a socially responsiblecompany that works with cotton and sesame producers (seeinset opposite); In Vietnam, with the company HIEP THAN that workswith underprivileged ethnic minorities in the north of the coun-try. This company has a strong social vision and wishes to de-velop a tea production chain that would provide a maximum

    of value-added to producers. To achieve that, an associationwas set up to support the development of sustainable far-ming practices and an export sector was created for organicand fair trade products. SIDI lent 23,000 euros to the com-pany to pay for the installation of a black tea production unitand wishes to support HIEP THAN in its quest for interna-tional outlets and in its reflection on the advisability of provi-ding financial services to the sectors inhabitants. In Ecuador with FAPECAFES, a group that wants to in-crease production and develop financial services for its 1,500members. SIDI is advising the organisation in its strategic re-flection on this subject and granted it a cash loan of 100,000dollars at the end of the year to finance the coffee season.

    SIDIs current challenge in pursuing actions underway is toboost its internal capacities in the area of agricultural finan-cing by capitalising on existing experiences and through trai-ning and recruitment of volunteers in order to continuesupporting partners in this complex field.

    Promoting solidarity credit

    unionsWest Africa (Senegal, Mali and Burkina Faso), CentralAfrica (DRC, Rwanda and Burundi), Haiti and Madagascar

    A solidarity credit union is a mutual assistance group whosemembers all contribute equally in order to have a self-managedand local savings and financing tool with an emergency fundthat provides access to health care. Solidarity credit unions alsoserve as a place to exchange experiences on activities, problems

  • 8/8/2019 SIDI - Annual Report 2009

    11/20The activities of sidi and its partners in 2009 11

    and launch common projects in health matters, collective in-vestments, seed purchases, etc.SIDI is working on training, an information system, strategyand financing with around a dozen organisations that promotesolidarity credit unions, particularly in far-flung rural areas. In2009, SIDI focused its efforts on the following: Training of leaders: Solidarity credit unions are socially-minded organisations that work with money, which may be di-verted from its goals, invested at the wrong pace or simplypoorly monitored and as a result may jeopardise the memberscontributions, increase inequality and create internal conflict.Therefore, the leaders of solidarity credit unions, which belongto organisations that promote such credit unions, provide theabsolutely essential support that is key to their success.

    Training in software used to monitor solidarity credit unions,developed by SIDI to gather reliable data that is used by soli-darity credit union programme directors for purposes of ana-lysis and communication and to coordinate the work of leaders. The activation of a large capitalisation project in order toreview the strengths and weaknesses of the solidarity creditunion 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 ofTanzania that buys and markets cotton and sesame from small localproducers.BIOSUSTAINs aim is to promote organic farming that meets the needsof farmers. To that end, the company offers farmers the followingadditional services:

    # BIOSUSTAIN familiarises with and trains farmers in organicfarming principles,

    # it undertakes in advance to buy the harvest and farmers agreeto produce organically,

    # it provides inputs (organic seeds and pesticides) on credit,repayable later from the harvests proceeds,

    # lastly, it gathers the harvest and makes sure it meets export

    requirements as follows:o Sesame is cleaned in keeping with EU standardso Cotton is separated from the seed in a cotton gin

    plantThe company, thanks to its social and environmental vision, is able to secure andimprove the income of more than 3,000 farmers. In mid-2009, SIDI granted it aloan of 100,000 dollars over 18 months, enabling BIOSUSTAIN to finance thecotton and sesame harvests.SIDI is deeply involved in the monitoring of the company and supports its planningwith a view to achieving a better definition of priorities and adjusting resources anddebt in tune with its needs. It also backs BIOSUSTAIN in its search for Europeanimporters. Apart from the fact that more farmers are getting involved in theprocess, the long-term challenge is to find the financing arrangements so that thecompany can acquire a cotton gin plant and make use of the processing techniqueas well as reduce cotton transport costs. This initiative is being conducted inassociation with CORDAID/Netherlands, an associate of SIDI and a partner ofBIOSUSTAIN.

    Today, there are more than 50,000 persons involved in the so-lidarity credit unions that have been identified by SIDI, particu-larly in rural areas.

    Meeting training needsSIDI responds on a regular basis to the training needs expres-sed by its partners.To cite one example, SIDI is pursuing its reinforced technical as-sistance drive in the Great Lakes region via the ongoing pre-sence of a desk officer, who in 2009 set in motion many trainingschemes for credit officers and accountants of partners locatedin the area. The use by staff of high-performance managementtools led to considerable development of the solidarity credit

    union network (see above). Moreover, SIDI made available adesk officer who oversaw a rural financing module that was partof the training schemes offered to employees of MFIs that aremembers of MAIN.

    * Medium-term financing, and more specifically productive investment, is notcommon in the South, which is why SIDI devotes a share of its resourcesto it.**Fair trade and organic production are appealing, beyond their social andenvironmental aspects, because of their potential outlets in the North andimproved promotion of local products.

    ADAPTING OUR RANGE OF SERVICES Amount of loans granted in 2009 829 152 EUROSof which dedicated loans 63 % Share of new loans devoted to:

    Medium-term financing (> 3 years)* 14 % Financing of productive investment* 27% Financing of rural businesses 26% Financing of organic farming** 7 % Financing of renewable energy carried out in 2008

    Financing of fair trade** 26% Number of solidarity credit unions backed by SIDI partners 2 500

    Social responsibility report

    GOVERNANCE

    LEVERAGE

    EFFECT

    RISk

    SUPPORT

    ADAPTATION

    RANGE OF SERVICES

  • 8/8/2019 SIDI - Annual Report 2009

    12/20The activities of sidi and its partners in 2009

    Investing in refinancing

    instrumentsFEFISOL and SMF EA in Africa, FOPEPRO in LatinAmerica, SEFEA in Europe, FINRURAL in Bolivia, TEM-BEKA in South Africa, BMS in Mali, RED FASCO in Gua-temala, FENACOOP in Nicaragua, FORTALACER in Peru

    SIDI invests in regional funds in order to respond to its part-ners increasing financing requirements. The provision ofsupport by the means of such secondary level instrumentspresents three advantages: they create leverage through the mobilisation of finan-cial resources from other donors they allow for the sharing of risks they make possible the better targeting of the actors inthe area of intervention.

    Amongst the actors identified as part of this process, SIDI fa-vours, in particular, the instruments created by the local insti-tutions themselves, since they have the advantage of beingwell acquainted with their environment and have the capacityto work together. In this way, SIDI has been able to carry outwork on the social performance of the institutions, with BMSin Mali and RED FASCO in Guatemala, whose respectivemembers have taken onboard the conclusions of this work.In 2009, SIDI worked with its partners in order to bring aboutthe creation of two solidarity investment funds, FEFISOL forAfrica and FOPEPRO for peasant farmers in the Andean re-gions. FOPEPRO was established at the end of 2009, and

    progress had been made regarding the creation of FEFISOL,notably through the identification of potential investors. Inboth cases, the challenge is precisely that of attracting the in-terest of public or private institutional investors in an approachthat is essentially solidarity based, in an environment in which

    microfinance is often analysed as an activity that should be lar-gely profitable.Furthermore, SIDI has established a relationship with FIN-RURAL, an umbrella institution of Bolivian MFIs, which wishesto create an instrument that will be able to use to refinance its

    members. Finally, SIDI has undertaken a feasibility study inHaiti with KNFP regarding the creation of a rural fund, theFRICS, which began its activities mid-way through the year(see focus opposite).

    Networking and collabo-rating with other alliances

    CCFD-Terre Solidaire, Frres des Hommes Italy, Fon-dation Poweo, the Ministry for Foreign Affairs, AFD, EU,SICAV Nord/Sud, Merkur Bank, Oikos, Calvert Founda-tion, Feu Vert pour le Dveloppement

    SIDI is consolidating its relationship with CCFD-Terre Soli-daire, in accordance with the desire expressed by the twoinstitutions to work in a more complementary fashion in thefield and also to propose a shared vision of an alternativeform of financing for development.In 2009, 23 partnerships were able to benefit from joint sup-port provided by SIDI and the CCFD, thereby confirming theworthwhile nature of an approach that combines financing,technical assistance and subsidies as part of a process des-igned to bring about fair development.Furthermore, in 2009 the work devoted to the mobilisation ofthe donors for the benefit of the partners represented 10%

    of the time spent by SIDI on technical assistance.It this way, it has been able to obtain almost 116,000 in co-financing for the AOPP in Mali, the Fonds Coopratif in Laosand the following Senegalese partners: JAPPOO, JARINOOJANT BI and JARDINS D'AFRIQUE, a JAPPOO partner,

    Creating supportmechanisms

    12

    As an actor of socialdevelopment, SIDIactively seeks tomobilise the efforts ofother institutions, bothto promote its ownvision of solidarityfinancing and toacquirecomplementaryresources for its

    partners. Indeed,whilst its ownresources are solid andstable, on their ownthey are not sufficientto respond to theneeds expressed bythe partners.Furthermore, at a timewhen commercialmicrofinance isexperiencing strong

    growth, SIDI wouldlike to reaffirm theneed to support thelocal developmentactors, particularly therural actors, who,despite their socialusefulness andpotential, are not yetprofitable.

    B

    iosustain

  • 8/8/2019 SIDI - Annual Report 2009

    13/20The activities of sidi and its partners in 2009 13

    which benefitted from financing for the installation of a solarpumping system at its agri-organic teaching farm.Finally, SIDI negotiated direct re-financing for a total of 1.3million from its alliances for ACAD in Palestine and CREDI-FLORIDA in Peru.

    SIDI is also involved in several networks and this enables itto exchange views on practices, to meet other actors or evento develop joint projects. In 2009, SIDI: maintained its active presence on the Board of Directors ofINAISE, the International Association of Investors in the So-cial Economy, of FEBEA, the European Federation of Ethicaland Alternative Banks and also of Epargne Sans Frontires. took part in the work of the FOROLACFR network in Latin

    America, which brings together 370 MFIs and whose work isdesigned to improve the provision of financial services in ruralareas. In particular, SIDI provided assistance at the FORO-LACFR conference on food securitisation and the role of

    rural MFIs and other financial institutions in this regard. Atthis event, SIDI was able to share its knowledge of WesternAfrican experiences in this area and also called for the inte-gration of the KNFP from Haiti, which presented the expe-rience of the Solidarity Credit Unions. maintained its commitment to the MAIN (a network of 90African MFIs which provides training and experience sha-ring), which took the concrete form of financing (cash ad-vances, loans) and of technical assistance (accounting, aidto seek out financing). In particular, it facilitated the esta-blishment of a MAIN representation in Europe and contribu-ted to the creation of a database on the activities, trainingneeds and satisfaction of its members.

    The Fonds Rural d'Investissement

    et de Crdit Solidaires (FRICS)in Haiti

    The KNFP, a partner of both SIDI and CCFD-Terre Solidaire in Haiti, is a networkof nine popular financing institutions that provides support to the farmersorganisations and training for the leaders of Solidarity Credit Unions throughits Mobile Training Institute (IMOFOR).

    With a view to responding to the need to strengthen the provision of support torural areas, the network initiated a process of reflection with its local partnerssome five years ago on the conditions surrounding the financing of the ruralworld (access, cost). In May 2009, this process of reflection, strongly supportedby SIDI, led to the creation of a rural fund, known as the FRICS (Rural fund forInvestment and Social Credit). Its purpose is to finance enterprises, smallenterprises, farmers organisations and cooperatives in the agricultural,livestock breeding, fisheries and agricultural processing sectors, as well as thetrade and small craft industry and employment generating rural services thatare not driven by speculation. The original nature of the FRICS will lie in the factthat its services will be made available across the country through the networksof the member institutions of the KNFP.Whilst at present this remains a project that is dependent upon the KNFP, the

    FRICS has, nevertheless, already granted funding on an experimental basis,which has made it possible to begin activities and to test the financingmethodology even before the formal creation of the fund:- financing of mango producers,- financing of the purchase of yokes for two cooperatives in the north of the

    country,- granting of a loan to the dairy cooperative, Lt a gogo, which promotes the

    consumption of quality local dairy products.Both the KNFP and SIDI firmly believe that a major part of the response to thedevastation caused by the earthquake lies in the relaunch of agriculturalproduction and processing. SIDI, together with the CCFD, is willing to assistthis development: it is currently supporting the network in its efforts to bring

    about the institutionalisation of the FRICS and has put its name forward tobecome a founder member of the fund and, to this end, is prepared to acquirea share in its equity capital and to provide a loan to fund its activities.

    LEVERAGE EFFECT

    Number of partners who have benefitted from leverage generated by

    SIDI Mobilisation of capital, loans, guarantees or subsidies acquired through SIDI 6 Amount of subsidies obtained as a result

    of SIDIs intermediation 125,332 Amount of loans mobilised as a result of SIDIs intermediation

    amongst allies in the North 1,3 M Number of days devoted to the search

    for complementary funding for the partners* 210 days Amount of new guarantees committed by SIDI 760,000

    Amount mobilised from banks at the local level 1,020,000For a leverage effect of 1.35

    Number of end clients of the umbrella

    organisations and funds 751,216 Number of active end borrowers 1,330,840

    Of which, 54% women and 65% in rural areas

    Number of active end savers 1,246,672Of which, 49% women and 57% in rural areas Number of producers who are members of partner Producer

    Organisations and other beneficiaries of rural enterprises 37 301

    * the largest element of technical assistance, representing 17% of the totalamount of time spent on TA.

    Social responsibility report

    GOVERNANCE

    ADAPTATION

    RANGE OF SERVICES

    RISk

    SUPPORT

    LEVERAGE

    EFFECT

  • 8/8/2019 SIDI - Annual Report 2009

    14/20The activities of sidi and its partners in 2009

    Taking part in the process

    of institutionalisation

    ASIENA in Burkina Faso, CGRH, CREC, JARINOO JANTBI in Senegal, ANED in Bolivia, FONDS COOPERATIF inLaos, PALESTINE GUARANTEE FUNDThe work carried out by SIDI regarding institutionalisation isdesigned to focus on two areas: the conversion of a project developed by a partner into anindependent structure, reflection upon the possibility of altering a partners legalframework in order to respond to a specific problem (regar-ding the way in which it operates, compliance with the law...).The aim is to ensure that the structure has the bases of along-term existence and a smooth form of operation, notablyin its relations with its stakeholders: shareholders, workers,clients...

    In 2009, SIDI took part in ongoing work of this kind in seve-ral areas, notably: reflection upon changing the statutes of ASIENA in Burkina(focus p. 9),

    the conversion of the Palestine Guarantee Fund, which hasthus far been managed by SIDI, into an institution governedby Palestinian law, the Refinancing and Guarantee Society,with the aim of serving all of the countrys MFIs (cf. p. 6), the creation of a social enterprise to provide energy solu-

    tions in Senegal, on the basis of the JARINOO JANT BI ex-perience undertaken with the UGPM and the CREC in theMkh region (cf. p. 9), provision of support for the process designed to bring aboutinstitutional change within the Fonds Coopratif in Laos in orderto respond to the constraints brought about by the changesmade to the legal framework in the country (cf. focus opposite)

    Reinforcing governanceAs well as playing its role as an active social investor, SIDIalso seeks to guarantee the smooth, long-term operation ofthe partners, without impinging upon their social vision.In order to achieve this aim, then first of all SIDI plays an ac-tive role on the 23 boards of directors of which it is a mem-ber (when SIDI holds equity in an organisation then itsystematically asks to be represented on that organisationsdecision-making body): this means not only taking part inmeetings but also in their preparation and being involved in thework carried out to ensure that decisions are implementedcorrectly. In this context, SIDI is particularly anxious to ensurethat a good degree of coherency exists between the partners

    social vision and their effective practices.Next, SIDI strives to ensure the smooth operation of the in-ternal decision-making bodies, notably through the provisionof support for the use of tools designed both to direct and tomonitor activities. In 2009, SIDI organised numerous training

    Ensuring the partnersinstitutional viability and social purpose

    14

    The role of SIDI as a patient investor is to work along side the LFS in order to ensure that they are able toprovide long-term financial services. This means that SIDI has to support them in their process ofinstitutionalisation, in the use of tools to direct and to monitor their activities, in the definition of their strategicpriorities and, finally, to ensure their good governance. In structures in which SIDI is a shareholder, then it playsan active part in governance bodies and has a say in the decisions that are taken to implement the general policy.

  • 8/8/2019 SIDI - Annual Report 2009

    15/20The activities of sidi and its partners in 2009 15

    courses on the use of management tools for seven partnersin the Great Lakes area and also took part in the creation ofa financial analysis chart within FECECAV in Togo.Finally, SIDI has continued to closely monitor changes withinseveral structures so as to ensure that they maintain their so-cial vocation, despite the fact that, in several cases, they havemade changes amongst their pool of investors. It has acqui-red part of the shares held by CORDAID (Netherlands) in theColumbian cooperative CONSOLIDAR, so as to allow it towithdraw from its capital, whilst at the same time ensuring thatthe cooperative is able to strengthen its credit activity withoutthe 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 inthe area (Uganda, Kenya, Tanzania and Sudan), SIDI has joi-ned forces with the founding Norwegian shareholder, theSTROMME Foundation, in order to seek out a new social in-vestor. This expansion of the SMF EAs pool of investors,which has been achieved through the inclusion of CORDAID(which is going to contribute with one million euros in equity),will serve to underpin its future development without callinginto question its initial vision (the economic and social well-being of its beneficiaries). Furthermore, SIDI also contributedto the capital increase of CAFEPERU (cf. p. 6), particularly in

    order to provide the enterprise with the means to resist theconsiderable pressure it was being placed under by a coffeemultinational that wanted to buy it.SIPEM was created in Madagascar in 1990 by two foundingshareholders, namely APEM, a Madagascan association, andSIDI. SIDI holds 25.41% of SIPEMs capital. The last timethe capital was increased, through a process that concludedin March 2009, SIDI kept its stake in SIPEM at the same levelin order to maintain its strong social goals and to guarantee aclear vision for the members of staff.

    An original and evolving

    financial structure:the Fonds Coopratif

    in Laos

    In 1996, SIDI and the Association de Soutien au Dveloppement des SocitsPaysannes (ASDSP) launched the creation of credit unions in order to enablesmall enterprises to access financing in Laos. These credit unions, which are pre-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 developtheir 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 andtechnical capacities of the network of these 13 member credit unions and to gua-rantee the continued development of the project. Accordingly, the Fund providestraining and support for the creation of new credit unions, as well as financingdesigned to increase the credit unions loan capacity. The Fund also provides di-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 thefarmers, notably through the sale of fair trade products, mainly in Europe).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 Funds ca-pital (in other words, 190,000) and has a seat on the Board of Directors. It alsoprovides the structure with a substantial amount of technical assistance.In its capacity as a member of the board, in 2009 SIDI supported the changemade within the management in order to improve the decision-making process.SIDI also approved calls made to alter the Funds legal structure. In fact, legis-lation in Laos had changed, requiring each credit union that is a member of theFund to obtain bank accreditation in its own right or to become an agency of theFund, a solution that has been approved by the General Assembly. The Coope-rative Funds team is now preparing the legal and operational implementation ofthis new organisation: the shares held by the credit unions will be transferred to

    the ASDSP, which will be strengthened for this purpose, and the cooperativesthemselves will be integrated within the Fund as agencies. SIDI is playing an ac-tive role in this work, which will continue during 2010 and which will require agreater degree of both technical and political support.

    GOVERNANCE

    Number of partners with whom SIDI takes partin strategic reflection 28 %

    Number of partners where SIDI is represented on the Board 23 Number of days devoted to governance 434 j

    Including 297 days spent participating in Board meetings

    Number of days devoted to institutionalisation 85 jInvolving 10 partners

    Social responsibility report

    ADAPTATION

    RANGE OF SERVICES

    LEVERAGE

    EFFECT

    RISk

    SUPPORTGOVERNANCE

  • 8/8/2019 SIDI - Annual Report 2009

    16/20The activities of sidi and its partners in 2009

    SIDIs 2009

    financial statementsSIDIs balance sheet at December 31, 2009 in thousands of euro

    16

    CCFD-Terre Solidaire27%French Financial

    Institutions 12%

    SursUrsulinesde Jsus 6 %

    Other 4 %

    Northern Partners 5 %

    Surs

    Auxiliatrices 17%

    ESD - pargneSolidarit

    Dveloppement29 %

    (Epargne SolidaritDveloppement -

    grouping of 1200

    individual shareholders)

    Breakdown of SIDIs capital at 31/12/09

    ASSETS2009 2008

    Net intangible assets 61 78Net financial assets 8,674 8 978

    of which shares and claims 4,394 4 159 of which loans 4,103 4 634 of which other financial assets 176 185

    Total fixed assets 8,735 9 056

    Claims (net value, including co-financing) 383 545

    Cash assets 1 9,295 5 302

    Accruals 122 19TOTAL 18,535 14 922

    LIABILITIES2009 2008

    Capital 13,000 9,000Reserves 546 269Profit/loss for the year 155 277

    Total equities 13,701 9,546

    Provisions2 180 138Loans 1,292 1,284Autres dettes 828 611

    Subscribed capital capital increase - 546Shareholders, current account 128 149F.I.D.3 - International guarantee fund 2,040 2,292C.D.C. Fund 366 358

    TOTAL 18,535 14,922

    3 Provisions on loansand equity investmenthave since 2004 been co-vered by the F.I.D., a hed-ging mechanism thatapplies, with a few ex-ceptions, to all invest-ment conducted by SIDI.It comprises current ac-counts of shareholderswho are convinced of theimportance for SIDI totarget difficult interven-tion areas.

    2 These are pro-visions for risks andfinancial provisionsfor exchange ratelosses.

    1 Cash (in-cluding F.I.D.),invested inethical securi-ties and invest-ment realestate.

    "S.A. SOFIDEEC BAKER TILLY, external auditor, a member of CRCC in Paris, represented by its chairmanMr Fouad EL M'GHAZLI, has certified without reservations SIDI's annual accounts, ended December31, 2009."

    The solidarity chain for financing

    LFSPO

    LFS LFS PO

    LFS

    1,300 shareholders

    Capital13 million deuros

    Refinancing fund TechnicalAssistance fund

    5,000 savers

    Income from the Joint Invest-ment Fund and from CCFD

    1.2 million euros/year

    Mobilisation offunds from

    alliances

    FID

    Final beneficiaries

    LFS: Local Financing StructuresPO: Producers OrganisationsFID:Development Incentive Fund (guarantee mechanism)

  • 8/8/2019 SIDI - Annual Report 2009

    17/20

  • 8/8/2019 SIDI - Annual Report 2009

    18/20The activities of sidi and its partners in 2009

    Mapof SIDIs

    partners*

    in 2009

    18

    FONHSUDINDEPCO

    KNFP / IMOFORHAITI

    * and Southern networks

    FEFISOLAfrica

    RESEAU MAINAfrica

    SMF EACentral Africa

    TEMBEKASOUTH AFRICA

    CAPADCOSPEC

    BURUNDI

    CRG

    FPFDGUINEA

    ADAPS MADAGASCARALAOTRA/SILAC

    PAMFSIPEM

    TITEMMADAGASCAR

    CAIXAS COMUNITARIASUGC-CPC

    MOZAMBIQUE

    Centenary bankOMIPA

    UGANDAADI-KIVUCCRDCOODEFIDRC (DEMOCRATIC REPUBLIC OF CONGO)

    IMPUYAKIPREFED-RWANDA

    RWANDA

    CGRH NIANINGCRECESCALES JAPPOOJAPPOO DEVELOPPEMENTJARINOO JANT BMEC PROPEMUGIE SAPCA/EGASUGPMSENEGAL

    AKIBABIO SUSTAIN

    TANZANIA

    MAFAsia

    AMRETHATTHA KAKSEKAR

    CAMBODIA

    FONDS COOPERATIFLAO FARMERS PRODUCTS

    LAOSHIEP THAN

    VIETNAM

    ETCKOKARIMECREFSINERGI

    TAANADINIGER

    MICROINVESTMOLDOVA

    KRKKOSOVO

    SEFEA

    Europe

    ANJCEALGERIA

    EACDEGYPT

    FAIR TRADE LEBANONNAJDEHLEBANON

    FOROLACFRLatin America

    FOPEPROSocit de gestion ACEROLA

    Andean Countries

    ANEDFINRURALBOLIVIA

    INDESCHILE

    CONSOLIDARCOLOMBIA

    SAINDESURURUGUAY

    BANCOSOLIDARIOCORECAFEFAPECAFESGRUPPO SALINASMCCHECUADOR

    RED FASCOGUATEMALA FENACOOP

    NICARAGUA

    CAFEPERUCONFIANZACREDIFLORIDAEDAPROSPOFORTALECERLA FLORIDAPERU

    AL AMANAAMSSFMOROCCO

    ACADASALA

    Guarantee FundPALESTINE

    ASIENAFNGN BTECMOGTEDO

    BURKINA

    AOPPAPIMBMS SAJEMENI ADERNIAKO ADERMALI

    FECECAVMAPTO

    TIMPACUCMECSWAGESTOGO

  • 8/8/2019 SIDI - Annual Report 2009

    19/20The activities of sidi and its partners in 2009 19

    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 ****COODEFI DRC MFIC 10.5 *ADI-KIVU DRC MUSO ***CCRD DRC MUSO 17.4 ****CRG GUINEA MFIC 17.8 ****FPFD GUINEA PO *PAMF MADAGASCAR MFIC 181.9 ***TITEM MADAGASCAR MFIC ***SIPEM MADAGASCAR MFIP 536.9 ****ADAPS MADAGASCAR PO 20.6 ****ALAOTRA/SILAC MADAGASCAR PO 100.0 **JEMENI ADER MALI MFIC 38.1 *NIAKO ADER MALI MFIC 45.7 *APIM MALI NETWORK *AOPP MALI PO ***BMS SA MALI UMBRELLA 152.5 ****CAIXAS COMUNITARIAS MOZAMBIQUE MFIC *UGC-CPC MOZAMBIQUE MFIC ****SINERGI NIGER FUND 22.9 **KOKARI NIGER MFIC 338.8 ***MECREF NIGER MFIC **

    TAANADI NIGER MFIC 348.7 **ETC NIGER PAVRA 1.5 *IMPUYAKI RWANDA MUSO *PREFED-RWANDA RWANDA MUSO ***CREC SENEGAL MFIC 174.8 ***MEC PROPEM SENEGAL MFIC 160.1 **ESCALES JAPPOO SENEGAL PAVRA 286.3 ***JAPPOO DEVELOPPEMENT SENEGAL PAVRA ****JARINOO JANT BI SENEGAL PAVRA ****CGRH NIANING SENEGAL PO 30.0 ***UGIE SAPCA/EGAS SENEGAL PO *UGPM SENEGAL PO 72.4 ***TEMBEKA SOUTH AFRICA UMBRELLA 380.9 ***AKIBA TANZANIA MFIP 419.6 ***BIO SUSTAIN TANZANIA PAVRA 70.5 ****FECECAV TOGO MFIC 83.8 ***TIMPAC TOGO MFIC 19.1 **UCMECS TOGO MFIC 5.5 **WAGES TOGO MFIP *

    MAPTO TOGO PO **OMIPA UGANDA MFIC ***Centenary bank UGANDA MFIP 475.4 *

    Latin America FOROLACFR Latin America NETWORK **FOPEPRO Andean Countries FUND 68.5 ****Socit de gestion ACEROLA Andean Countries OTHERS 1.7 ****ANED BOLIVIA MFIP 142.8 **FINRURAL BOLIVIA FUND ***INDES CHILE MFIP 85.1 **CONSOLIDAR COLOMBIA MFIC 78.8 ***BANCOSOLIDARIO ECUADOR MFIP 165.4 *CORECAFE ECUADOR PAVRA 14.0 *FAPECAFES ECUADOR PAVRA 152.2 **GRUPPO SALINAS ECUADOR PAVRA **MCCH ECUADOR PAVRA *RED FASCO GUATEMALA UMBRELLA 164.9 ****FENACOOP NICARAGUA UMBRELLA 140.1 **CAFEPERU PERU PAVRA 344.1 **CONFIANZA PERU MFIP 142.0 *CREDIFLORIDA PERU MFIC 67.9 **EDAPROSPO PERU MFIC *FORTALECER PERU UMBRELLA 180.0 ***LA FLORIDA PERU PO ****SAINDESUR URUGUAY MFIC 108.7 **

    Asia MAF Asia FUND *AMRET CAMBODIA MFIP 290.8 *HATTHA KAKSEKAR CAMBODIA MFIP 238.1 ****FONDS COOPERATIF LAOS MFIC 190.1 ****LAO FARMERS PRODUCTS LAOS PAVRA 73.7 **HIEP THAN VIETNAM PAVRA 23.1 ***

    Medit. Basin ANJCE ALGERIA OTHERS ***EACD EGYPT MFIC 264.4 *FAIR TRADE LEBANON LEBANON PAVRA 59.0 **NAJDEH LEBANON MFIC 28.1 *AL AMANA MOROCCO MFIP 245.6 ***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

    GOVERNANCE

    AT JUNE 18, 2010

    BOARD OF DIRECTORS

    SCHMITZ ChristianChairman of the Board of Directors

    GUENARD GeneviveBoard Member

    RICARD XavierBoard Member

    SUPERVISORY BOARD

    AURENCHE GuyChairman

    MESNY PhilippeVice-chairman

    CAISSE DES DEPOTS ETCONSIGNATIONSRepresented byCHABRILLAT Pascale

    CCFD - TERRE SOLIDAIRERepresented by LESAY Martial

    CONGREGATION DESSURS AUXILIATRICESRepresented bySister Marie-Thrse GAUD

    CONGREGATION DESURSULINES DE JESUSRepresented bySister Christiane GROSSIN

    CREDIT COOPERATIFRepresented by MORET Laurence

    EPARGNE SOLIDARITEDEVELOPPEMENTRepresented byDEQUEKER Guy

    BITSCH GrardMember

    AREA PARTNERS COUNTRY CATEGORY

    SIDIS PORTFOLIOAT 31/12/09. IN THOU-

    SANDS OF EURO (CAPITAL,

    LOANS, GUARANTEES)

    VOLUME OF SUPPORTIN TIMESPENT BYTHE TEAM

    The portfolio is invested as follows: 45% in equity capital, 45% in loans and 10% in guarantees.For further information, see www.sidi.fr

  • 8/8/2019 SIDI - Annual Report 2009

    20/20

    INTERNATIONALSOLIDARITY FORDEVELOPMENT AND INVESTMENT

    12 rue Guy de la Brosse75005 Paris - Francetl. : 33(1)40 46 70 00fax : 33(1) 46 34 81 [email protected]

    www.sidi.fr

    2

    010-PrintedinFranceonrecycledpaperwithvegetableink.