SIDI trip to Tunisia, local solutions to global challenges

At the beginning of November, a group of SIDI savers and solidarity shareholders travelled to Tunisia to discover how their investments come to life in the field. The trip enabled them to meet SIDI’s local partners and discover the projects supported, thus embodying the chain of financial solidarity that unites savers here and micro-entrepreneurs or small producers there. Tunisia is facing multiple crises: democratic transition at a standstill, deteriorating public services, galloping inflation, very high unemployment, particularly among young people, large-scale emigration to Europe and Canada, illegal immigration from sub-Saharan Africa, and so on. Added to these political, economic and social challenges is the environmental issue, and in particular the water crisis exacerbated by recurrent droughts. In this context, SIDI’s partners, whether in sustainable agricultural sectors such as Beni Ghreb and South Organic, or in the microfinance sector such as Enda Tamweel, play a crucial role in supporting vulnerable communities in their economic development and improving their living conditions.

Enda Tamweel: microfinance for emancipation

Enda Tamweel has become the country’s leading Microfinance Institution (MFI): 472,000 customers for a country of 11 million inhabitants. SIDI has been a partner since its creation in 2015, when it acquired a stake in the MFI. Enda Tamweel offers small loans designed to support micro-entrepreneurs and small farmers in their economic activities. It primarily targets the informal sector (59% of its customers live below the poverty line), women and young people, and the rural sector with strategic support for agriculture. Today, the MFI is the leading financier of small-scale agriculture in Tunisia. During our visits, we were able to talk to beneficiaries whose inspiring stories illustrate the impact of this organization. In a working-class district of Tunis, we met Amina, a shopkeeper who has been an Enda customer for many years. Amina is on her 12th loan cycle with Enda, which has enabled her to expand her business, build up sufficient stock, send her children to school and secure her future. In another district, a sewing workshop supported by Enda for over 20 years now employs seven women, demonstrating that microfinance can be a lever for long-term sustainable development. In Kairouan, in the center of the country, another beneficiary impressed us with his small dairy cow farm. This project, which began with the purchase of a single cow thanks to a microcredit, has gradually grown to include seven cows and a fully-equipped barn. With the ongoing support of his specialist advisor, he now meets the strict standards of the local dairy, which collects his milk. From the farmer who started out with just one cow to the craftswoman who makes evening dresses and now employs seven seamstresses, these initiatives bear witness to the lasting impact of microfinance. This support goes far beyond the financial. Enda offers all its customers free training and local support, guaranteeing a strong relationship of trust between loan officer and beneficiary, as well as the sustainability of projects and genuine social inclusion. These initiatives transform not only individual lives, but entire communities.

South Organic and Beni Ghreb: innovation in the face of the water crisis

In southern Tunisia, water management is a daily challenge for farmers, especially date growers. We headed for the Hazoua oasis, on the Algerian border, where a family of producers has set up and runs a small business marketing and exporting Beni Ghreb dates. The company is backed by the Groupement pour le Développement de l’Agriculture en Biodynamie, which groups together around a hundred producers from the oasis. The dates produced are of the excellent Deglet Nour variety. Attending the date harvest on one of the producers’ plots is a magical moment. We were able to see the sprinkler irrigation system in place, which saves 70% of water consumption, and allows other crops to grow between the date palms, notably fruit bushes. We then visited the packaging unit, which employs around a hundred young women from the village. Beni Ghreb is struggling to maintain its autonomy in a very fragile economic context. The emotion was palpable when the founder recalled that, thanks to the financial support of SIDI, and therefore of its shareholders, the community had overcome major crises such as drought, insect infestations, and above all the Covid crisis which had halted exports. “This project is life for Hazoua,” he insisted. South Organic, another of SIDI’s partner date-packing and export SMEs, located in Kebili some 100 km further east, is also tackling the water issue with innovative solutions. South Organic works with 200 certified organic producers and employs just over 500 people, most of them women. Accompanied by the director and quality control manager, we visited their Al Wahaat pilot orchard, where the hydraulic engineer in charge of the project explained the irrigation system in place. This system drastically reduces water wastage by targeting the exact needs of crops, storing water, and alternating irrigation techniques according to the time of year. With this optimal water management, the crop stages under the date palms (legumes, arboriculture etc.) are re-established and can provide growers with additional income while promoting local biodiversity. The pilot orchard is open to all farmers in the region; they are invited to visit the plot and adopt these new techniques, thus amplifying its impact on a local scale.

A universal message

Each stage of this journey illustrated the strength of concrete and effective international solidarity. The projects encountered, whether in microfinance or sustainable agriculture, embodied the values that SIDI stands for: perseverance, solidarity and respect for people. For the participants, the trip not only enabled them to see the impact of their investments, but also to nurture their commitment to fairer, more sustainable development.

Discover SIDI’s 2021 activity report

The 2021 Activity Report is online!

The year 2021 was still very much marked by the effects of the Covid19 pandemic, but let us salute everyone’s commitment, which enabled SIDI to pursue its mission as a solidarity investor serving the financial and economic inclusion of populations excluded from conventional financial systems.

Discover the performances and achievements of SIDI and its partner organizations, all committed to ecological and social transition. Aware of the significant financing and support needs that remain, SIDI is fully mobilized to respond to the ever-increasing challenges facing the most vulnerable populations.

Let’s stick to our course and our ambition to promote socially responsible finance!

 

 

 

 

View the webinar on partner support

[chapeau]You can watch or re-watch this new edition of Les Témoins en Actes webinar on support, the cornerstone of the solidarity investor’s mission.[/chapeau]

The webinar featured Abdou-Rasmané OUEDRAOGO, Managing Director of Union des Baoré Tradition d’Epargne et de Crédit (UBTEC). UBTEC is a microfinance institution that operates mainly in rural areas of northern Burkina Faso, in the Sahelian zone, while maintaining a strong peasant base thanks to the fact that it was founded by Burkina Faso’s main peasant federation.

SIDI’s General Manager, in dialogue with SIDI’s partnership manager, came to talk about the relationship forged with SIDI to support farmers in the Ecological and Social Transition. Support from the ACTES Foundation has made it possible to finance and support the agro-ecological practices of UBTEC members.

 

Webinar: Partner support

[chapeau]To strengthen its support for its partners, SIDI has created the ACTES Foundation under the aegis of the Terre Solidaire Foundation. In this new webinar, Les Témoins en Actes focuses on support, the cornerstone of the solidarity investor’s mission.[/chapeau]

To find out more about the tailor-made support provided by the ACTES Foundation to SIDI’s partners, we invite you to a new ” Témoins en ACTES ” event on Thursday March 31 from 5 to 6.30pm.

This time we welcome Abdou-Rasmané OUEDRAOGO, Managing Director of Union des Baoré Tradition d’Epargne et de Crédit (UBTEC).

UBTEC is a microfinance institution that operates mainly in rural areas of northern Burkina Faso, in the Sahelian zone, while maintaining a strong peasant base thanks to the fact that it was founded by Burkina Faso’s main peasant federation.

The Managing Director of SIDI will give us his account, in dialogue with SIDI’s partnership manager, of the relationship forged with SIDI to support farmers in the Ecological and Social Transition. Support from the ACTES Foundation has made it possible to finance and support the agro-ecological practices of UBTEC members.

1h30 of discussions to better understand the links between SIDI’s investment and support activities, and the challenges it faces in consolidating its support mission with its partners.

→ Register for the webinar here

The first edition of Les Témoins en Actes webinar welcomed Assata DOUMBIA, producer and president of the ECAM cooperative in Côte d’Ivoire. You can read his testimonial and watch the webinar again:

Focus on technical support for rural African players

Created in 2011 by SIDI and its partners, the Fefisol fund offers a technical assistance (TA) facility to African rural players, in addition to its financial support. After conducting nearly 140 TA projects on the continent, SIDI and Alterfin are due to launch a second fund in 2022, with the ambition of further deepening its social and environmental approach to the companies financed.

Financing and TA, fertile ground for the growth of agricultural entities in Africa

By Gabrielle Orliange, Head of Social and Environmental Performance SIDI/Fefisol (published in Secteur privé & développement #36, La revue de Proparco, 4th quarter 2021)

In Africa, microfinance and the rural sector are of little interest to the traditional banking system. However, technical support (TS) for agricultural entities, combined with appropriate financial services, play an essential role in the continent’s sustainable development. This is why the Fefisol fund (Fonds européen de financement solidaire pour l’AFrique), in addition to its financial support, offers a technical assistance facility to rural players. In this context, it provides its customers with specialized service providers who help them to strengthen their viability and improve their productivity, while preserving the living conditions of small-scale agricultural producers.

Since its creation just ten years ago, Fefisol has financed 139 support projects for 51 customers in 22 African countries. Over two-thirds of beneficiaries are small microfinance institutions (MFIs) undergoing consolidation[1] or agricultural entities. A quarter of the technical support projects supported by the fund relate to financial issues, in particular accounting monitoring and strengthening internal control.

The technical support program reinforces the impact of financial support. At the beneficiary level, the two levers of action are complementary: Fefisol loans enable companies to grow their business, while technical expertise helps them secure this growth by improving their efficiency. In terms of fund management, technical support in return enables investment managers to improve their understanding of how investee companies operate, thus guaranteeing greater operational efficiency.

Fefisol’s TA offer stands out above the rest by providing a tailor-made response to customer needs. The customer is heavily involved in the entire process, including the selection of the service provider. This sense of ownership is also reinforced by the direct financial contribution that each customer must make to the project[2].

INVOLVE THE CUSTOMER IN ALL PHASES OF THE PROCESS

Over the decade, the needs of Fefisol’s customers have changed considerably. For almost two years now, due to the economic crisis linked to the Covid-19 pandemic, requests to the fund have mainly been for equipment coverage not provided for in their annual budgets. For their part, MFIs have asked for support in managing liquidity in a crisis context. Fefisol has responded to this need by organizing, with partners, an online training course on this topic.

The independent evaluation of the facility in 2019 will assess the impact of technical support on beneficiaries. Many TA missions respond to opportunities and needs for fundamental change within beneficiary institutions. In many cases, TA projects have helped to kick-start an in-depth transformation process. By enabling customers to test innovations more quickly and easily, they help speed up the implementation of optimal solutions.

Several lessons can be drawn from these ten years of activity. The main one remains the need for the customer to take ownership of the technical support project. As such, his involvement in the process is crucial, from defining his needs for a customized solution to managing the consultant. It is also important to maintain a certain degree of agility throughout the implementation of TA projects, to ensure an effective response.

MEETING THE CHALLENGE OF PROJECT IMPACT ASSESSMENT

Downstream, the major challenge of this type of scheme remains that of evaluating the impact of TA programs on beneficiaries. Thanks to the possibility of granting successive financing and to its processes for monitoring the performance of its customers, Fefisol nevertheless has powerful tools for characterizing and documenting this impact over time.

To support this ramp-up, a Fefisol 2 fund will be launched in March 2022. Following on from Fefisol 1, it will continue to offer financial and technical services to rural MFIs and agricultural entities, with the ambition of deepening its social and environmental approach to projects. As such, the AT facility will have a compartment dedicated to improving sustainable agricultural practices and financing agriculture, while retaining its “tailor-made” approach so as to meet all its customers’ needs.

[1 ] Tier 3 MFIs, with total assets of less than USD 5 million.

[2 ] This mandatory contribution – at least 15% of each mission – explains the relatively low average value of TA projects.

 

Focus on technical support for rural African players

Created in 2011 by SIDI and its partners, the Fefisol fund offers a technical assistance (TA) facility to African rural players, in addition to its financial support. After conducting nearly 140 TA projects on the continent, SIDI and Alterfin are due to launch a second fund in 2022, with the ambition of further deepening its social and environmental approach to the companies financed.

Financing and TA, fertile ground for the growth of agricultural entities in Africa

By Gabrielle Orliange, Head of Social and Environmental Performance SIDI/Fefisol (published in Secteur privé & développement #36, La revue de Proparco, 4th quarter 2021)

In Africa, microfinance and the rural sector are of little interest to the traditional banking system. However, technical support (TS) for agricultural entities, combined with appropriate financial services, play an essential role in the continent’s sustainable development. This is why the Fefisol fund (Fonds européen de financement solidaire pour l’AFrique), in addition to its financial support, offers a technical assistance facility to rural players. In this context, it provides its customers with specialized service providers who help them to strengthen their viability and improve their productivity, while preserving the living conditions of small-scale agricultural producers.

Since its creation just ten years ago, Fefisol has financed 139 support projects for 51 customers in 22 African countries. Over two-thirds of beneficiaries are small microfinance institutions (MFIs) undergoing consolidation[1] or agricultural entities. A quarter of the technical support projects supported by the fund relate to financial issues, in particular accounting monitoring and strengthening internal control.

The technical support program reinforces the impact of financial support. At the beneficiary level, the two levers of action are complementary: Fefisol loans enable companies to grow their business, while technical expertise helps them secure this growth by improving their efficiency. In terms of fund management, technical support in return enables investment managers to improve their understanding of how investee companies operate, thus guaranteeing greater operational efficiency.

Fefisol’s TA offer stands out above the rest by providing a tailor-made response to customer needs. The customer is heavily involved in the entire process, including the selection of the service provider. This sense of ownership is also reinforced by the direct financial contribution that each customer must make to the project[2].

INVOLVE THE CUSTOMER IN ALL PHASES OF THE PROCESS

Over the decade, the needs of Fefisol’s customers have changed considerably. For almost two years now, due to the economic crisis linked to the Covid-19 pandemic, requests to the fund have mainly been for equipment coverage not provided for in their annual budgets. For their part, MFIs have asked for support in managing liquidity in a crisis context. Fefisol has responded to this need by organizing, with partners, an online training course on this topic.

The independent evaluation of the facility in 2019 will assess the impact of technical support on beneficiaries. Many TA missions respond to opportunities and needs for fundamental change within beneficiary institutions. In many cases, TA projects have helped to kick-start an in-depth transformation process. By enabling customers to test innovations more quickly and easily, they help speed up the implementation of optimal solutions.

Several lessons can be drawn from these ten years of activity. The main one remains the need for the customer to take ownership of the technical support project. As such, his involvement in the process is crucial, from defining his needs for a customized solution to managing the consultant. It is also important to maintain a certain degree of agility throughout the implementation of TA projects, to ensure an effective response.

MEETING THE CHALLENGE OF PROJECT IMPACT ASSESSMENT

Downstream, the major challenge of this type of scheme remains that of evaluating the impact of TA programs on beneficiaries. Thanks to the possibility of granting successive financing and to its processes for monitoring the performance of its customers, Fefisol nevertheless has powerful tools for characterizing and documenting this impact over time.

To support this ramp-up, a Fefisol 2 fund will be launched in March 2022. Following on from Fefisol 1, it will continue to offer financial and technical services to rural MFIs and agricultural entities, with the ambition of deepening its social and environmental approach to projects. As such, the AT facility will have a compartment dedicated to improving sustainable agricultural practices and financing agriculture, while retaining its “tailor-made” approach so as to meet all its customers’ needs.

[1 ] Tier 3 MFIs, with total assets of less than USD 5 million.

[2 ] This mandatory contribution – at least 15% of each mission – explains the relatively low average value of TA projects.

 

ECAM wins the international Grands Prix de la Finance Solidaire!

[chapeau]SIDI partner ECAM, a cocoa producers’ cooperative, wins the International prize at the 12th Grands Prix de la Finance Solidaire organized by FAIR-Finansol and Le Monde newspaper. A highly deserved reward for this exemplary Ivorian cooperative in terms of both its social and environmental impact. [/chapeau]

Assata Doumbia, producer and president of the cooperative: “I’m delighted to receive this award for our cooperative. In Côte d’Ivoire, it’s rare to find cooperatives with good governance. This prize also crowns all the work we’ve put into our governance. Today I’m very happy for the producers and for the whole community!

The Entreprise Coopérative des Agriculteurs de Méagui (ECAM) was created in 2004 on the initiative of 87 cocoa producers, including Assata Doumbia. A very dynamic cooperative, ECAM now has a membership of 2,466 cocoa farmers and, remarkably, 367 women. As cocoa is traditionally a “man’s business”, ECAM encourages planters to hand over part of their plots to their wives, enabling these women to become producer-members of the cooperative and thus securing their situation.

Solidarity finance has played a crucial role in ECAM’s development, with the number of members more than doubling since it first became available. This financing, since 2017 through FEFISOL, the investment fund in which SIDI is a founding shareholder, and then from SIDI since 2020, has first enabled it to limit payment delays to its producers. And, more generally, to guarantee a degree of autonomy vis-à-vis its buyers, whose pre-financing is both uncertain and insufficient in terms of duration and amount. Today, it’s the banks that come to us with their offers,” smiles the President of ECAM, “but we prefer to stay with our partner SIDI because only solidarity finance enables us to have, beyond financing, the support that is essential to us.

With nearly 7,000 tonnes of production per year from an area of over 1,2883 ha, ECAM is now one of Côte d’Ivoire’s best-known cocoa cooperatives. ECAM provides its members with strong added value, stemming directly from its social and environmental vision: to strengthen the financial autonomy of its members and their families while respecting the environment. In cooperation with its members, the cooperative decides how to use the premiums linked to the Fair Trade and UTZ/Rainforest certifications it has acquired: almost half of these premiums are paid back to producers in proportion to the volumes delivered. The remainder is used for social projects providing direct aid to the poorest, or for public services such as building schools or pumps.

The environmental issue, crucial in the cocoa sector, has been central to the cooperative’s approach since 2016: distribution of shade trees to planters as part of an agroecological approach, geolocation of plots to respect protected forest areas. In 2018, it started a program to convert some of its members to organic: 55 are certified organic to date, making it one of the country’s 5 organic cooperatives. Around a hundred growers have also begun conversion.

SIDI wishes ECAM every success in the future and will continue its commitment to the development of cocoa that respects producers and their environment.

Successful 5th African Microfinance Week in Kigali

[chapeau]The 5th edition of African Microfinance Week brought together nearly 600 inclusive finance professionals from 55 countries in Kigali, Rwanda. A tremendous success![/chapeau]

African Microfinance Week (AMW) is the largest conference on inclusive finance in Africa. Organized every two years in a different African country, it features conferences, training and workshops, an innovators’ village, and of course the investor fair in which the SIDI team plays an active part. A networking event dedicated exclusively to investors and African MFIs, the investor fair enables SIDI to forge future partnerships.

The SAM is an essential event for exchanging and sharing expertise on inclusive finance. The theme chosen for this year’s event was resilience: ” You’re not born resilient, you become resilient: strengthening inclusive finance to better overcome crises “. This was the first time the SAM had been held in Rwanda. This choice has enabled us to shine the spotlight on a country that has shown tremendous resilience and a phenomenal ability to adapt.

As always, the SIDI team was on hand. The emotion of being back in the flesh, and seeing the success of our participation, was palpable.

Why so many people? The impact of microfinance has always been the subject of debate. It’s a fact that microfinance is resilient, that it continues to provide concrete solutions and that, thanks to the leverage it generates, it enables individuals to define their own destiny.

At this 5th edition, everyone was able to gauge the vitality of African MFIs. In the face of the health crisis, MFIs ultimately managed to cope with the liquidity problems they faced. This shows the considerable work carried out by MFIs over the past 20 years, making them already resilient. The current crises – whether the health crisis linked to Covid19, the ensuing economic crisis, the issue of access to employment for young people, or the crucial challenge of adapting to climate change – must also be an opportunity to change practices, innovate, and advance the solutions that enable this adaptation. From the investor’s point of view, crises can have the beneficial effect of encouraging us to get closer and more involved together.

SIDI continues to forge ahead, placing solidarity at the heart of the economy and finance. Invest in small MFIs, establish long-term partnerships, share the partners’ vision and risk, so that these partnerships serve to consolidate the structures. Supporting the MAIN network in its capacity building program for its members – over 125 African MFIs! Defend the importance of technical assistance and support in response to the needs expressed by partners, to serve an inclusive economy in a process of ecological and social transition.

Some pictures of the event:

(c)GODONG // (c)SIDI

VAHATRA and ECAM nominated for the Grands Prix de la Finance Solidaire!

[chapeau] Every year, FAIR and the newspaper Le Monde join forces to award the Grands Prix de la finance solidaire. This year, for the 12th edition, two SIDI partners have been nominated in the International Prize category: the ECAM cocoa cooperative in Côte d’Ivoire and Vahatra, a social micro-finance institution in Madagascar. [/chapeau]

In Madagascar, the Vahatra association – Malagasy for roots – was created in 2002 by two associations, one French and the other Malagasy, with the aim of combating extreme poverty in the center of the island. The originality of its intervention lies in the fact that it combines savings, credit, social support and mutual health insurance services.

Vahatra targets people living below the poverty line (less than 2USD/day) and 67% of its customers are women. In addition, 77% of its portfolio is dedicated to agricultural financing. Its integrated approach, combining economic and financial tools with social and health support, makes it a unique partner in a country that suffers from a lack of public support and dramatic inaction in rural areas. The association gives these poor people the opportunity to benefit from advice, training and loans, enabling them to develop an income-generating activity. This economic support is backed up by individualized social follow-up to help families resolve other problems, such as children’s schooling, lack of identity documents, health or family budget management.

Vahatra has benefited from solidarity finance since 2015 through SIDI in the form of guarantees that have enabled it to take on debt with local banks in order to develop its portfolio. This contribution is necessary for an MFI that targets populations considered too risky by other players. In addition, solidarity finance provides Vahatra with support for its future institutional transformation. Although Vahatra will be supporting 17,277 borrowers in 2020, it is not yet self-sufficient and needs to step up its activities to break even. In order to be able to receive capital financing and comply with the requirements of the regulator, it has therefore embarked on a transformation into a limited company. With the separation of microcredit and social activities, the latter should be fully covered by subsidy programs, enabling the microcredit component to boost its profitability. The association will retain a majority shareholding in the SA dedicated to microfinance in order to guarantee its social mission. SIDI is also examining the possibility of acquiring a stake in the future entity, to help ensure the sustainability of its unique and essential service offering in this very poor region of Madagascar.

The Entreprise Coopérative des Agriculteurs de Méagui (ECAM) is located in the southwest of Côte d’Ivoire, in the country’s leading cocoa-producing region. The cooperative was created in 2004 on the initiative of 87 cocoa producers. A very dynamic cooperative, ECAM currently has 2113 cocoa farmers, including 322 women. As cocoa is traditionally a “man’s business”, ECAM encourages planters to hand over part of their plots to their wives, enabling these women to become producer-members of the cooperative.

ECAM brings strong added value to its members as a direct result of its social and environmental mission. The cooperative thus has a five-year development plan drawn up in cooperation with its members, which it uses to determine how to use the premiums linked to the fair trade and UTZ/Rainforest certifications it has acquired. Half of these premiums are paid directly to producers in proportion to volumes delivered, in line with our policy of improving their income. The cooperative also helps them diversify their income, mainly through market gardening and poultry farming. At the same time, part of the premiums is used for social projects: direct aid to the poorest – distribution of food and school kits, for example – and public service projects such as the construction of schools or pumps.

Solidarity finance has played a crucial role in the development of ECAM, which has seen the number of its members double since it gained access to it. This financing, since 2017 through FEFISOL, the investment fund in which SIDI is a founding shareholder, and then from SIDI since 2020, has first enabled it to limit payment delays to its producers. And, more generally, to guarantee a degree of autonomy vis-à-vis its buyers, whose pre-financing is both uncertain and insufficient in terms of duration and amount.

With nearly 6,500 tonnes of production per year from an area of over 1,202 ha, ECAM is now one of Côte d’Ivoire’s most recognized cocoa cooperatives, as much for its operational performance as for its social and environmental impact.

ECAM is a cooperative that supports its producers while respecting the environment. The environmental issue, crucial in the cocoa sector, has been central to its approach since 2016. The cooperative geolocates plots to preserve protected forests, and is developing a nursery project to distribute shade trees to planters, with the aim of limiting evaporation in the dry season and recreating biodiversity in the plots. In 2018, it started a program to convert some of its members to organic: 55 are certified organic to date, making it one of the country’s 5 organic cooperatives. Around a hundred growers have also begun conversion.

Join FAIR and Le Monde in Lyon on November 9 to discover the 2021 winners!

Further information: www.vahatra.mg www.ecam-meagui.com