The activities of

SIDI

and its partners in

2004

International Solidarity for Development and Investment

Table of Contents

Chairman’s message Solidarity finance and the realities of support to partners SIDI and its activities
Financing for our partners Supporting partners Identifying partners, the search for finance and mechanisms to cover risks, analysis of social viability

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Glossary
ACAD: Arab Center for Agricultural Development (Palestine) ADER: Association for Regional Economic Development (Mali) ADI-Kivu: Association pour le Développement intégré au Kivu AFD: Development French Agency (France) ADIE: Association pour le Droit à l’Initiative Economique (France) ALTERFIN: Financial Co operative (Belgium) AMSSF: Association Marocaine Solidarité Sans Frontière (Morocco) AMRET: new name: EMT “Ennatien Moulethan Tchonnebat” (Cambodia) AOPP: Association des Organisations Professionnelles Paysannes (Mali) ASPRODEB: Senegal Association for Promotion and Development à la Base (Senegal) BANCOSOL: Banco Solidario (Bolivia) BANCO SOLIDARIO: Banque Solidaire (Ecuador) BMS: Solidarity Malian Bank (Mali) CAC La Florida: Cooperativa Agraria Cafetalera (Peru) CCFD: Catholic Committee against Hunger and for Development (France) CCG: Cooperative for guarantee security and management (Haïti) CCRD: Caisse de Crédit Rural pour le Développement (DR of Congo) CCSP: Credit Co - operative to support Small Producers (Laos) CDC: Caisse des Dépôts et Consignations (France) CEP: Capital Aid Fund for Employment of the Poor (Viet Nam) CERUDEB: Centenary Rural Development Bank (Uganda) CFS: Community Finance Structure COD-EMH: Co ordination of Development Operations - Methodist Church (Haïti) CONFIANZA: Entidad de Desarrollo para la pequeña y micro empresa (Peru) CONSOLIDAR: Cooperativa Corfas de Credito Solidario (Colombia) COODEFI: Coopérative Financière et de Développement Economique (DR of Congo) CORDAID: Catholic Organisation for Relief and Development (The Netherlands) CRG: Rural Credit of Guinea (Guinea) EDAPROSPO: Equipo de Aseroramiento a Actividades Productivas de Sectores Populares (Peru) ESD: Saving Solidarity Development Association (France) ESF: Epargne Sans Frontière (France) EU: European Union FAEF: Fonds d’appui à l’Entrepreunariat Féminin (North Kivu) FAPECAFES: Federacion Regional de Asociaciones de Pequenos Cafetaleros Ecologicos del Sur (Ecuador) FENACOOP: Fédération Nationale des Coopératives de Producteurs (Nicaragua) FC: Fonds Coopératif (Laos) FENAGIE Pêche: Fédération Nationale des Groupements d’intérêt Economique de Pêche (Senegal) FID: Fond d’Incitation au Développement (France) FONHSUD: Haïtian Fund to promote Local Development in the Southern Province (Haïti) GRET: Groupe de Recherches et d’Echanges Technologiques (France) HIVOS: Humanist Institute for Development Cooperation (The Netherlands) IMOFOR: Mobil Institute for Training (Haïti) INDES: Inversiones para el Desarrollo (Chile) INDEPCO: Institut National pour le Développement et la Promotion de la Couture (Haïti) IRAM: Institut de Recherches et d’Application des Méthodes de développement rural (France) JEMENI: Union des Caisses Mutuelles d’Epargne et de Crédit (Mali) KNFP: National Council for Grassroot Financial system (Haïti) KRK: Kreditimi Rural I Kosoves LLC (Kosovo) KOKARI: Co - operative of intermediation in rural credit services (Niger) LA-CIF: Latin American Challenge Investment Fund (South America) LIDE: Ligue pour le Développement (North Kivu) MAF: Microfinance Alliance Fund (Asia) MAE: Ministry of Foreign Affairs (France) MAIN: Microfinance African Institution Network MFI: Microfinance Institution MICROFUND: Institution mutualiste de droit togolais (Togo) MISEREOR: Aktion Gegen Hunger Und Krankheit In Der Welt (Germany) MUFED: “Women and development“ Credit Union (Burkina Faso) MUSO: Solidarity Credit Union OIKOS: Danish Cooperative Bank Investing microcredit schemes (Denmark) OMIPA: Oruchinga Microfinance Promotion Agency (Uganda) PROFUND: Fondo de Inversiones incorporado en Panamá PREFED: Programme Régional de Formation et d’Echanges pour le Développement (Rwanda) ROPPA: Réseau des Organisations Paysannes de l’Afrique de l’Ouest SAINDESUR: Inversiones para el desarrollo (Uruguay) SAPCA-EGAS (ex UGIE): Société d’Approvisionnement, de Production, de Commercialisation et de Conseil Agricole des Ententes des Groupements Associés du Senegal (Senegal) SIDA: Swedish International Development Agency SIPEM: Investment Company for Investment Promotion in Madagascar (Madagascar) TEMBEKA: Social Investment Company Limited (South Africa) TIMPAC: Tous Impliqués dans la mobilisation des ressources locales et la promotion des actions communautaires (Togo) TITEM: Union of credit and savings local associations (Madagascar) TRIODOS: Social Bank (The Netherlands, England and Belgium) UGPM: Union of Peasant Associations from Meckhe (Senegal) WAGES: Women’s Association for both Gain Economic and Social (Togo)
ACTIVITIES
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Chairman’s
Message
wo years of the 2003-2005 development plan have just come to a close. Have we fulfilled our mission to strengthen support for community financial services? Have we contributed to the evolution of SIDI’s portfolio, responded to our partners’ new needs and consolidated their financial innovations? Have we contributed to the institutional strengthening of SIDI ? The answer is yes, thanks to the support of many partners, shareholders and alliances who shared our vision of a solidarity economy. We have boosted and increased solidarity financing practices set in motion by local organizations. We have supported the capacity of local economic players to become active and productive in their own environment. We have also redoubled our attention to rural areas. In 25 years, microfinance has provided access to financial services to millions of families who had previously been excluded from banking services. In the 1990s, microfinance was heralded as the tool of choice for poverty reduction. The disasters that struck in 2004 amplified and expanded poverty throughout the world. More than half of humankind does not have access to formal financial systems and the divide between rich and poor is growing daily. Microfinance is not a universal solution to poverty reduction, but rather an approach whose usefulness and interest have been recognized at world level. In 2005, declared the Year of Microfinance by the United Nations, microfinance should serve more and more people throughout the world. By offering loans and securing savings, microfinance is a source of hope to thousands of low-income people that they will be able to plan for their future. However, today it is still difficult to gauge and assess the impact of microfinance on the fight against poverty. That is why we must continue to come up with new solutions that will boost the social impact of solidarity financing, so that we may meet the different needs of family farms, make it possible for them to invest in production equipment, promote marketing by farmers’ organizations and provide access to housing and medicine. The engineering of solidarity financing has a long way to go before it exhausts all its possibilities. In order to cover the diverse need for financial services, a range of innovative initiatives has been created. SIDI is already linked with them and is working in partnerships with the CFSs* (Community Financial Services) in the South and the East. These are true leaders in their local solidarity economy and include credit and savings unions, microfinance institutions, solidarity credit unions, NGOs, people’s banks, producers’ organizations, associations, etc. They offer financial services to people who have been excluded from banking services. SIDI seeks to offer its partners financial support, institutional monitoring, technical support, networking services on many continents and an analysis of their social viability. SIDI, because it covers these 5 dimensions with its own financial resources, is in a very unique position in the solidarity finance landscape. Thanks to the Solidarity Chain for Financing, we are able to set in motion our mission to consolidate the MFIs (see chapter 2) with a view to achieving equitable and sustainable development.

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T

Here in the North, innovative alternative mechanisms have been developed in a number of areas, such as solidarity financing, ethical investing, microfinance support operators, etc. In this setting, SIDI holds a unique position because : - it is not a bank in the process of discovering the size of the lowincome market, - it is not a donor granting official financing, - nor is it a consultancy firm that draws up and designs projects. SIDI is a chain of solidarity activists. Our commitment to provide solidarity financing services is founded more on values than on tools. It is based on trust, social relationships, social cohesion and the maximisation of solidarity over profit. We defer to local conditions and culture, focusing on the needs of the beneficiaries and on local practices (see chapter 1). We are convinced that by building alliances, on the basis of our experience in the field with our partners, we can build a viable international system. All the solidarity players who have put these innovations to work already communicate well with each other, thanks to the development of networks and modern means of communication. It is now possible to pool their efforts, learn from others and transfer know-how and skills from North to South, within the South and from South to North. Since 2002, SIDI has been getting more deeply involved in the Solidarity Chain for Financing and has been strengthening the connection between the mobilization of solidarity savings in the North and its use by institutions in the South and East that are trying to improve the well-being of the populations they serve. In order to achieve that goal, SIDI tracks the Social and Development Viability of its partners in order to ascertain the impact of financial services on local institutions and their customers. The focus is on social, environmental and ethical issues, to ensure that investments make good economic sense. Notwithstanding the diversity, complementarity and the abundance of the links in the Solidarity Chain for Financing, and regardless of the number of participants, the level of skills and degree of openness, SIDI and its partners will always be a “bellwether” in the world of microfinance. At the close of the current 2003-2005 strategic plan, the total estimated outstanding amount of investments is expected to be on the order of 5.8 million euros (realizable with the current equity capital of 5.3 million euro and 0.5 million euros in borrowing). But the need for new financing resources is pressing and at the General Assembly of 8 June 2005 the SIDI shareholders will propose an increase in capital to fund the new partnership consolidation and development plan for the next 3 years (20062008). Thanks to you and your support we will be able to pursue our mission into the future.

Mobilising the solidarity chain to exchange, innovate and capitalise 22 SIDI’s financial statements 26

Christian SCHMITZ
Chairman of the Board of Directors Paris, 8 June 2005.

I NTERNATIONAL S OLIDARITY FOR D EVELOPMENT AND I NVESTMENT
12, rue Guy-de-la-Brosse 75005 Paris - France Tél. : + 33(0) 1 40 46 70 00 Fax : + 33(0) 1 46 34 81 18 Website : www.sidi.fr

Design and production: SIDI Poussières d’Étoiles - Courtabœuf (91) + 33 (0) 1 60 92 42 72

* Comonly used MFIs, the denomination used in this report

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SIDI

A N D I TS PA RT N E R S I N

2004

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Focus on SIDI’s positioning and activities in 2004

Solidarity finance and the realities of support to partners
A look back at the history of microfinance
At the end of the 1970s, microfinance began to develop in order to enable populations that had been excluded from banking services to gain access to financial services, such as loans, savings and others. Over the past 25 years, projects, NGOs, associations, credit unions and savings and loan co-ops have flourished around the world and today serve more than 60 million people across the globe. Microfinance has had a remarkable career and more than 7,000 microfinance organizations are active today1. Microfinance is now widely used as a poverty reduction tool and has successfully proved that loans can be granted to disadvantaged populations in an efficient and sustainable manner. Set up in 1983 by the Catholic Committee against Hunger and for Development (CCFD), SIDI was part of the very first initiatives to provide access to financial services for people excluded from the banking sector, first in the form of equity participation in micro-enterprises in the South and then, starting in 1994, via support in the form of loans and participation in the capital of microfinance institutions, with a view to expanding the scope of their interventions. Today, the achievements of microfinance have been singled out and recognized as having made real progress in terms of increased income, access to health care, education and housing. However, studies have shown that it is not necessarily the most disadvantaged populations that can make the best use of a loan. The ones that most benefit are those who have an economically viable project. When the United Nations declared 2005 to be the Year of Microfinance, it also set a number of ambitious targets. Today, 60 million people have access to microfinance services; the UN target is to increase that figure to 200 million in the next 5 years2. The goal is therefore to achieve a much broader coverage of financial services, in particular in rural areas. SIDI designs its interventions with these two goals in mind: to help a greater number of people gain access to financial services and at the same time target the disadvantaged.

Solidarity finance at the heart of SIDI’s activities
SIDI’s position in relation to microfinance players3
Historically, these local institutions often began with state subsidies or funding from public or private development aid agencies4, and technical assistance from local and international specialized NGOs that contributed greatly to the start-up of initiatives, such as the creation of the CRG in Guinea, AMRET in Cambodia, TIMPAC in Togo and AL AMANA in Morocco. In other cases, such as SIPEM in Madagascar and INDES in Chile, a few visionary local private businessmen committed to create a financing structure to meet demand. Still others began as strong community organizations, such as local associations and farmers’ organizations that started by offering financial services to their members. At that time, it became clear that the microfinance programmes, until then funded by public and private subsidies, had to become financially independent in order to ensure their future. The aim was to transform them into local structures able to provide financial services over the long term. There was a need for stable resources in order to consolidate operations, attract additional financing and support growth. These local microfinance structures went by the name of microfinance institutions (MFIs). SIDI was one of the first to recognize the need for long-term resources, and to accept the risk by contributing to the equity of local microfinance institutions5, or to grant them mediumor long-term loans to help them expand their activities.

SIDI supports the emergence of new local players able to act independently and provide sustainable financial products and services to disadvantaged populations. Forging partnerships based on trust, transparency and the respect of values are key elements of SIDI’s vision.

private individuals8, who together have accumulated 5.3 million euros in capital for the benefit of the MFIs in developing countries. A humane and committed Solidarity Chain for Financing The solidarity partnership promoted by SIDI is centred on the Solidarity Chain for Financing from North to South. In the North, individual and institutional shareholders and more than 6,000 solidarity savers who have accrued savings of nearly 50 million euros in a shared solidarity investment help to bring SIDI’s operations to fruition. They constitute SIDI’s financial and moral foundation. In the South, the community finance structures use this solidarity investment to grant financial services to the disadvantaged. In 2004, SIDI worked in 30 countries with 58 partner institutions, 4 of which are regional in scope : the MAIN network in Africa, PROFUND and LACIF in Latin America and MAF in Asia. Institutional maturity Since its creation in 1983, SIDI has been a pioneer in this field; most of the investment funds having been set up at the end of the 1990s, or later.9 Patient and tailored funds combining loans, capital participation and guarantees Patient funds are set up for the long-term and for the benefit of the MFIsin order to generate significant social impact. SIDI combines the conventional finance tools – loans, capital participations and guarantees – which makes it possible to work with a wide range of partners (see chapter 2) in accordance with a variety of tools. SIDI’s financial commitments at 31 December 2004 to its partners in the South and East amounted to 4.6 million euros, an 18% increase over 2003. This breaks down as 4.5 million euros for the loan portfolio10 and capital participations, i.e. 2.6 million in capital participations plus 1.9 million in loans, in addition to 0.1 million euros in guarantees.

SIDI, a solidarity investor
Today, there are 436 investment funds devoted to microfinance with a total capital of 700 million euros 38 already existing and 5 new ones in creation. These funds make a vital contribution to the MFIs in the form of loans or capital participations, alongside bilateral and multilateral agencies and private foundations that also contribute to the capital of the MFIs. While some of these funds aim for relative financial profitability, others act to achieve strong social viability. SIDI is a “responsible and patient investor”, whose goal is to make capital available to the MFIs in support of their development and growth. SIDI is also a solidarity investor in the sense that it contributes financing first and foremost to achieve social viability and not simply to attain financial results. While SIDI acts alongside other solidarity investors, it has a number of unique and noteworthy characteristics.7 Our founders pursue a vision based on social concerns and development SIDI was created by CCFD, with which it shares common values in terms of vision and mission. The choice of our partners is based on the quality, motivation and the vision of the men and women who work for them, and not on the profitability of the institution or the yield from our investment. We share with CCFD the conviction that our partners are the most appropriate ones to promote our development mission. Socially responsible investors In all, SIDI has 500 shareholders, ranging from CCFD, institutional investors, religious congregations and

SIDI, a player in solidarity finance
Solidarity financing is for people who have been economically and socially sidelined. Its goal is to reduce inequalities that hinder access to financial services. The MFIs in the South are the focal point of solidarity finance. Their strength lies in their knowledge of and proximity to the customers and the relationship of trust they enjoy with them.
ACTIVITIES
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SIDI

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5

Focus on SIDI’s positioning and activities in 2004

In a bid to fine-tune its activities to achieve institutional development, between 2001 and 2004 SIDI offered loans in local currencies, thanks to the creation of an exchange rate risk coverage mechanism called the FID (Development Incentive Fund). At 31 December 2004, two-thirds of our portfolio was committed in local currencies. A preference for capital participation Capital participations enable the MFIs to benefit from a sustainable source of financing and to raise additional resources in the form of loans, thanks to a leverage effect. At the end of 2004, 58% of our capital was invested in the form of capital participations and 42% in the form of loans. SIDI assumes a high level of risk when it acquires a stake in the MFIs, often when they are just starting financial operations. SIDI participates in the capital of young institutions that have high potential at the time of their creation, which is precisely when they need long term funds. SIDI’s recent investments include the Crédit Rural of Guinea, Kokari in Niger, AMRET and HATTHA KAKSEKAR in Cambodia, Caja Rural San Martin and Confianza in Peru, MAF in the Philippines, KRK in Kosovo, TEMBEKA in South Africa and the Fonds Coopératif in Laos. The need to redeploy our capital From the standpoint of SIDI is shareholders, capital participation implies specific management in terms of the risks, returns and above all the allocation of resources (see study on page 15 entitled “The issues of Disinvestment”). In 2004, three capital disposals took place in Latin America: two partial disposals in INDES (Chile) and PROFUND (a Latin American instrument) and a third involving the entire participation in Bancosol, in Bolivia. A small fund with numerous financial partners SIDI, with its 5.3 million euros in capital, is classified among small funds, but it is unique in that it invests in a large number of local institutions. At the end of 2004, forty-one MFIs benefited from SIDI financing: twenty-one in the form of capital participations, four

of which were also granted loans, and twenty in the form of loans only. Furthermore, three partners OMIPA in Uganda (a SIDI partner since 2002), the Fédération des Paysans du Fouta Djallon in Guinea and COODEFI in the Congo – benefited from a SIDI guarantee in 2004. The average outstanding amount of loans granted by SIDI was 80,000 euros and the average size of participations 122,000 euros, which are relatively small sums compared to those granted by other funds. This demonstrates SIDI’s desire to diversify its portfolio and illustrates its philosophy to refrain from being the biggest shareholder of a -MFI, other one exception being TEMBEKA in South Africa, in order to ensure that this young structure will find other investors. Financial commitments for diversified partners: an example from 2004 SIDI has chosen to pursue a policy of diversified approaches and partners who offer a tailored response to the socio-economic context of their area of activity. In 2004, SIDI granted thirteen financing packages worth a total of more than 1 million euros, comprising nine loans and four participations, six of which were first-time financing by SIDI. Five of these partners offer access to financing in cities11 (SIPEM in Madagascar, CERUDEB in Uganda, JEMENI and NIAKO in Mali and MICROFUND in Togo), six operate in rural areas (UGPM in Senegal, KOKARI in Niger, TIMPAC in Togo, CAJA RURAL SAN MARTIN in Peru, FAPECAFES in Ecuador and HATTHA KAKSEKAR in Cambodia), and two are refinancing institutions (MAF in Southeast Asia and TEMBEKA in South Africa). (See table no. 1 showing the geographical breakdown of new investments in 2004). Developing appropriate financial instruments is a goal that SIDI incorporated in its three-year strategic plan (2003-2005). In 2004, three guarantees were issued for rural partners: OMIPA in Uganda, COODEFI in the Congo (for the solidarity credit unions in the North Kivu region of the Congo) and the Fédération des Paysans du Fouta Djalon in Guinea.
ACTIVITIES
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A significant advance in SIDI investments in Africa Only 6% of all microfinance investment funds are devoted to Africa12. On the other hand, since 2003, Africa has received SIDI’s largest financial commitment, in the form of loans and participations, amounting to 45% in 2004, compared to 34% in 2003, followed by Latin America with 27%, compared to 31% in 2003, a result of the transfer of our capital from three MFIs in the region (see graph no. 1). Africa is also the continent with the highest average amount invested per country (224,000 euros), the outcome of large sums invested in participations, in particular in SIPEM in Madagascar, TEMBEKA in South Africa and CERUDEB in Uganda (see table no. 2). Creating a leverage effect with refinancing funds SIDI has invested in three large regional refinancing funds, Profund and Lacif in Latin America and MAF in Asia. That has enabled SIDI to intervene in countries where it had not previously been active and to have a very significant leverage effect on certain partners, such as Banco Solidario in Ecuador….

- international financing partners (0.5 million euros), covering 28% of expenses; - revenue from its portfolio (0.2 million euros), covering 11% of expenses. The second year of its action plan, 2004, saw strengthened commitments in West Africa with new partnerships in Mali, Togo, as well as in Ecuador and Peru, and identification missions in Benin, Ecuador, Peru, Nicaragua, Moldavia and the Mediterranean Basin. In 2004, Africa received 44% of SIDI’s support resources (see table no. 3).
Total in 2004 Total in 2003 in € Ks in € Ks 604 274 181 227 233 100 0 100 0 0 0 25 1 019 728 620 489 400 237
Table 1: destination of SIDI financing: new investments

Africa Latin America Asia Mediterranean basin Caribbean Eastern Europe Total of which loans of which participations

Graph 1:

K€ 2 500 2 000
2 020

SIDI portfolio as of 31/12/2004 per continent (loans, equity investments and related claims)

SIDI, a solidarity sponsor
A combined development and investment mission This is where SIDI’s originality in relation to other social investors is most evident. SIDI’s financing for partners is always accompanied by a development support mission, made possible thanks to the Solidarity Chain for Financing. Some 6,000 solidarity savers share the proceeds of their savings, which helps SIDI raise funds for its development mission. In 2004, SIDI raised 1.8 million euros to pay for its activities and support our partners. These funds came from the following sources: - CCFD and shared income from solidarity investment (1.1 million euros), which covered 61% of expenses;

1 500
1 186

1 000 500 0
As ia M ed ite rra ne a ba n sin Ca rib be an L Am atin eri ca Eu ro pe Af ric a
347 561 210 136

Average amount invested per country in K€ Africa 224 Mediterranean basin 173 Latin America 169 Haiti 210 Asia 140 Europe 68 Total 164

Average amount invested per partner in K€ 16 partners 126 3 partners 116 11 partners 108 3 partners 70 6 partners 94 2 partners 68 41 partners 109

Table 2: average amount of SIDI investments

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Focus on SIDI’s positioning and activities in 2004

A support mission for backing small institutions SIDI’s support mission consists of contributing technical assistance for its partners, in addition to support for small institutions in crisis zones, where SIDI’s only possibility is to conduct an ongoing and thorough monitoring of their progress. SIDI’s partners cover a wide range of profiles, e.g. large institutions that pursue a mission for access to financial services for a large number of customers, such as AL AMANA in Morocco with 140,000 customers, CERUDEB in Uganda with 52,000 borrowers and 400,000 depositors, BANCO SOLIDARIO in Ecuador, which serves more than 100,000 customers, JEMENI in Mali with 34,000 members and 10,000 borrowers, HATTHA KAKSEKAR and AMRET in Cambodia, the Crédit Rural in Guinea, and others. SIDI’s partners also include smaller institutions that act on the ground for social change and offer financial services in isolated areas, such as UGPM in Senegal, the Fonds Coopératif in Laos and OMIPA in Uganda; in crisis zones, such as Palestine, Lebanon, Haiti and the Great Lakes region in Africa; as well as producers’ organizations that provide financial services to their members, e.g. AOPP in Mali, FAPECAFES in Ecuador, CAC La Florida in Peru and FPFD in Guinea. SIDI support for sustainable institutional development through the quality of the partners
Table 3: expenses in 2004 for support partners

Staff with diversified skills in the service of the partners SIDI’s paid staff is made up of sixteen persons, seven of whom have geographical responsibilities and devote around half their time to field missions with partners, one institutional partnerships coordinator, a social viability officer, and one person for support West Africa, who also carries out missions abroad on a regular basis. The administrative staff comprises a person in charge of promoting solidarity investment products, an accountant, a management secretary and two operational assistants. Volunteer consultants are recruited for their specific skills in management and accounting, banking, law and human resources. They share SIDI’s vision, reinforce the work carried out by the geographical officers and provide important support to our partners. The organization of SIDI’s staff revolves around missions and capitalization activities. For example, in 2004, capitalization and an assessment were conducted on the financing of health care schemes and information and management systems. Social viability Unlike a bank, a microfinance institution assigns itself a social responsibility goal for its clients and pursues a moral commitment to achieve good social performance. The goal of social viability is to reduce poverty, which is also a leading aim of solidarity financing. It combines, on the one hand, access to financial services by various population groups and poverty reduction with, on the other hand, the notion of fairness so that financial services are evenly shared among the various strata of the population. Social viability has been adopted by the SIDI staff and ties in with the missions of the geographical officers, whether in the field of institutional viability, i.e. governance, business plans, etc. or institutionnal viability, i.e. innovation and adapting services to the population, external relations with communities, etc. of the MFIs. A leverage effect for our partners SIDI’s staff also seeks out complementary financing for consolidating and increasing its partners’ operational outreach (see chapter III).
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Getting involved in networks SIDI’s staff, convinced that the professionalization of its partners, and of its own staff, requires exchanges and training, have also got involved in supporting networks (see chapter III, page 22). SIDI backs the MAIN network, the organization of an Asian exchange seminar in Cambodia, the participation in the Sanabel and the Foro Lac networks, among others.

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AFD, MAE, USAID, ACDI, Rockdale Foundation and others.

Local NGOs with a micro-credit activity, microfinance institutions, commercial banks, networks of co-ops or credit unions, farmers’ organizations offering financial services to their members, etc.
5 6 Sources: “Fonds d’investissements internationaux, mobilisation des investisseurs vers la microfinance”, Patrick Goodman, Appui au Développement Autonome, Luxembourg, November 2003. Followed by “Microfinance Investment Funds, key features”, Publication ADA/KFW, February 2005. 7

These unique characteristics may be found in other social investment funds as well, such as Alterfin, Oïkocrédit, Luxmint and others.

8 For further details, please see the SIDI presentation cassette entitled “Donnons du sens à notre argent” (Let’s make sense of our money), March 2005, produced by Guy Spica. 9

1 Sources: Elizabeth Littlefield, CGAP, workshop at SIDI, April 2004. Of these 7,000 microfinance organizations, fifteen cover more than half of all customers and the others each serve more than 1,000 customers.

ibid. 2. The average length of SIDI loans disbursed in 2004 was 3.5 years.

10

It is estimated that demand is equal to around 600 million, possibly as many as a billion, customers that have yet to be served, i.e. ten times greater than today’s coverage.
2 3

According to the classification of our partners established in the activity report of SIDI and its partners in 2003.
11 12

Microfinance is the management of small sums of money used to provide a range of products and services.

Excerpt from “Financing Microfinance Institutions: the context for transitions to private capital”, Marc de Sousa-Shields, Cheryl Frankiewicz, USAID, December 2004.

SIDI and
TISE (POLOGNE) KRK (KOSOVO)

its partners

SIDI’s development mission, without being a service provider, features technical support, and institutional follow - up in the medium- and long-term. Chapter 2 deals with the various components of SIDI’s fields of activity in 2004.
Total in 2004 Total in 2003 in K€ in K€ 581 624 96 84 81 38 221 178 124 63 136 137 95 72 1 307 1217

COD/EMH FONHSUD KNFP INDEPCO (HAITI) FENACOP (NICARAGUA) PROFUND (COSTA-RICA) CONSOLIDAR (COLOMBIE) FAPECAFES BANCO SOLIDARIO (EQUATEUR)

AMSSF AL AMANA (MAROC) FENAGIE PECHE ASPRODEB - UGPM SAPCA/EGAS (SENEGAL)

NAJDEH ACAD (LIBAN) (PALESTINE) BMS NIAKO AOPP JEMENI I (MALI)

CRG FPFD (GUINEE-CONAKRY)

INTAMBWE (RWANDA)

KOKARI (NIGER) MUFEDE (BURKINA-FASO) WAGES TIMPAC MICROFUND (TOGO)

MAIN NETWORK (AFRIQUE) CERUDEB - OMIPA (OUGANDA) AKIBA (TANZANIE) FAEF - LIDE ADIKIVU - COODEFI (RDCONGO) SIPEM - TITEM (MADAGASCAR)

FONDS COOPÉRATIF CCSP (LAOS) CEP - WUSOP (VIETNAM) AMRET HATTHA KAKSEKAR (CAMBODGE) MAF (PHILIPPINES)

Africa Mediterranean basin Eastern Europe Asia Latin America Caribbean Transverse support Total

CSRM EDAPROSPO - LA-CIF CONFIANZA - CAC LA FLORIDA (PEROU) BANCOSOL (BOLIVIE)

INDES (CHILI)

SAINDESUR (URUGUAY)

TEMBEKA (AFRIQUE DU SUD)

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SIDI and its activities

Financing for our partners
Our role of solidarity investor requires skills in financing and technical support for our partners. In addition, our mission to build long-lasting partnerships to promote development missions, in association with our founders - also requires that we carry out capitalization and reflections and locate financing in order to provide better support to our partners. This section of our activity report deals with the work of SIDI’s technical staff. Using a few representative events from 2004, we will describe our financing and support tasks. We will not be presenting here all of our partners as the aim is to explain, through examples, our activities. form of loans or capital participations. SIDI gives preference to equity participations in order to assume a share of our partners’ risks and to make long-term resources available to them. Investing in the capital of the MFIs means immobilizing SIDI’s financial resources over the long haul, receiving no income for several years and adapting to the internal context (the vision) and the external context (see “Disinvestment issues at SIDI: why and under what conditions ?”, page 15). Granting medium-term financing to our partners Jemeni in Mali, Niako in Mali, AMRET in Cambodia and UGPM in Senegal It has been demonstrated that microfinance is better adapted to the needs of activities that have a short cycle, such as trading, small restaurants, services and crafts, and that it is cautiously exploring agriculture financing. Farming has its own characteristics and limits, which explain why it is difficult to meet demand in this sector. The difficulties in mobilizing savings in the farming and rural sectors are an obstacle to the creation of sustainable financing services. Microfinance in Mali, as in many other countries, is a dynamic and innovative sector but a fragile one that must innovate cautiously. JEMENI, a 35,000 member credit union, operates mainly in cities but, in response to heavy demand from organized rural groups, has decided to offer its services to the rural areas. Thanks to a 5-year loan granted by SIDI in 2004, JEMENI in Bamako and NIAKO in Kayes can now grant loans to the disadvantaged1 for building houses in Bamako and for buying farm machinery. This 5-year loan granted by SIDI have a significant impact on JEMENI and NIAKO, demonstrating to the population that the institution is solid, in good financial health and has a promising future. For SIDI, a massive policy for medium-term loans is more difficult to implement because of the amounts involved, which are often larger - the construction of a house in Mali requires a 2,000 euros loan per beneficiary - and the low capital turnover. To remedy the situation, SIDI needs to find complementary financing to meet the needs of our partners, such as an alliance with CORDAID to complement our loan granted to JEMENI.
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Reinforcing financing for farmers Financing in the rural areas has been a linchpin of SIDI’s commitments and reflections in 2004. Several financing packages have been granted specifically for rural areas in Peru, Ecuador, Guinea, Kosovo, the Great Lakes, Senegal, Mali and Morocco. SIDI is convinced that financing for farmers, whose access has been relatively low, must be increased. Farmers’ organizations, grappling with an increasingly complex, unstable and competitive sector, play a vital role in providing services, both financial and nonfinancial, to producers. They face the issue of financing with particular acuteness because they must fulfil the following tasks: - finance economic and technical initiatives that they develop for their members; - improve access by farming communities to financial services; - generate resources to cover their own operating expenses. While UGPM and SAPCA-EGAS in Senegal, AOPP in Mali and CAC la Florida in Peru opened the way in 2002-2003, SIDI has managed in 2004 to strengthen its financial commitment to two new farmers’ organizations: the Fédération des Paysans du Fouta Djalon (FPFD) in Guinea, and the Fédération des paysans producteurs de café (FAPECAFES) in Ecuador. Furthermore, the debate on agricultural financing has prompted SIDI to improve financing instruments and guarantees in order to facilitate the opening of credit lines with local banks. Collateralising farm loans The Fédération des Paysans du Fouta Djalon (Guinea) Agricultural financing brings with it a high level of risk, both internal risk caused by price instability, weather conditions, etc., and external risk, owing to the low level of the organizations’ structure, inadequate management tools, etc. There is often a need to securitize the risks taken on by the lender. The Fédération des paysans du Fouta Djalon (Guinea) asked SIDI in 2004 for assistance in funding a seed
1

Photo SIDI.

An employee in an office in Niako, Kayes, Mali.

Consolidating the equity base of the MFIs New partners in 2004: MAF - Microfinance Alliance Fund, and the Caja Rural San Martin (Peru) Reinforcing SIPEM (Madagascar), CERUDEB (Uganda)

and fertilizer buying campaign that it conducts on behalf of its members. The Federation brings together 280 farmers’ groups comprising 13,500 producers, organized in 18 specialized unions broken down by sectors. In order to increase producers’ income, the FPFD works to improve yields of three crops: potatoes, onions and tomatoes, mainly by supervising the supply of inputs and providing assistance on farm techniques and marketing. For each growing season, the Federation has to mobilize funds for financing the collective purchase of inputs, mainly seeds and fertilizer, that it provides to its members on credit, in exchange for payment in kind. SIDI has guaranteed a loan in local currency granted to FPFD by the local bank, BICIGUI (a subsidiary of BNP). This guarantee was arranged quickly and helped us take the first step in a financial relationship that may well develop over the coming years. Getting to know the financial services offered by the AOPP farmers’ organizations in Mali The financing of farming activities by producers organizations is a complex operation that requires a higher level of professionalism and the members’ familiarity with the credit procedure, all of which is costly in time and energy. AOPP, a national federation of Malian producers, has opted to set up credit services for its members for the production and marketing of certified seeds. Making use of financing granted in 2003, SIDI and AOPP undertook in 2004 to analyse the situation and the

Truck loaded with onions, Fouta Djalon, Guinea.

S

IDI makes use of shareholder resources from the North to consolidate its partners’ finances in the

Photo SIDI.

For theses families, salary is less than 115 € monthly

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SIDI and its activities

Focus

The issues of Disinvestment at SIDI: why and under what conditions?
This last issue is at the heart of SIDI’s considerations relating to disinvestment. Of course, SIDI’s aim is not to disinvest come what may, but to ensure that its investment remains in line with its mission and vision and that it benefits the MFIs that most need it. operations in 1995 and will terminate at the end of 20052. Most of the disinvestments were either pre-negotiated with local shareholders (a reference group at a value relative to the balance sheet, with payment facilities), or sold to new investors, at times via MBOs3.

SIDI invests in microfinance institutions Ever since the CCFD, along with other institutions and individuals, embarked on the creation of SIDI more than 20 years ago, they were been conscious of the need to carry out actions with an eye on the future. Throughout the ensuing years, this consideration has been at the fore of SIDI’s concerns, that is, how to find the most appropriate and efficient way to set up financial assistance and support for micro-enterprises in developing countries so as to facilitate their involvement in the economic fabric while at the same time safeguard SIDI’s own exixtence. Thus, in the past 10 years, SIDI altered the focus of its interventions and decided to concentrate on microfinance institutions (MFI), rather than on micro-enterprises themselves. The MFIs that act as SIDI partners range widely, from mutuals, co-ops, NGOs, banks and financial institutions. They provide quality community financial services to the populations that have traditionally been excluded from formal financial circles. The MFIs also try to lift the initiatives of these populations out of the under-development pattern where, , they have been relegated, owing to a lack of resources,. One of the first organizations to recognize the need for equity capital, to take the risks SIDI contributed to the hard resources (shareolder equity of MFI’s) the MFIs’ hard resources (shareholder equity). MFIs need stable resources over the long haul in order to consolidate their operations and attract additional financing for their growth. Is SIDI disinvesting? Participation in the capital of a MFI is a big commitment for SIDI and has the following characteristics : • Risk, whether political, financial (devaluation risks), operational or regulatory. • Income: Unlike a loan that generates a regular flow of cash from interest paid in accordance with a specific timetable, shareholders in general receive no dividends, particularly in the first years of an MFI. • Resources: When and how to recoup sums invested in order to redeploy them on new partnerships.

impact of this financing on the members and the organization, in order to learn lessons about the difficulties encountered and make any necessary adjustments (see Focus, page 15: “Financing a certified seed-production and commercialization programme with AOPP in Mali”). Participating in marketing financing FAPECAFES in Ecuador, CAC La FLORIDA in Peru, SAPCA EGAS in Senegal, the Fair Trade mission (South Africa and Madagascar) The financing of the economic activities of the FOs2, such as for marketing, requires large volumes of resources. In Ecuador, FAPECAFES, the regional federation of small organic coffee producers in the South of the country, defends the interests of small farmers, who are also its founders. The Federation, created by 4 regional associations with the organizational support of VECO, a Belgian NGO, assigned itself the task of setting up an independent, efficient and competitive national and international marketing structure for buying coffee from local producers and exporting in sufficient volumes to secure a good position when negotiating with wholesalers. In 2004, SIDI granted a loan to finance FAPECAFES’ coffee season, in conjunction with a loan from ALTERFIN, similar to SIDI’s financial commitment to CAC la Florida in Peru for coffee marketing. Financing from SIDI and ALTERFIN meant that FAPECAFES was able to disburse advances to producers’ associations in April and May and pay producers at delivery of the harvest, from June to August, without having to await sales receipts (in September). In Senegal, the privatization of the groundnut sector, initiated by the state, has moved ahead. However, SAPCA EGAS in Senegal has not yet succeeded in overcoming its difficulties and will require a large rescue plan. Marketing, a vital task of the producers’ organizations, requires large amounts of financing and, at times, a search for outlets where farmers can sell their products at the best price. In 2004, SIDI organized a mission to South Africa and Madagascar with CCFD and SOLIDARMONDE to hold talks between producers’ organizations and SOLIDARMONDE and to find common ground between SIDI and CCFD. The mission identified some potential but a number of difficulties remain to be resolved before tangible results can be expected.

Developing ties between the MFIs and local banks: CCRD/COODEFI in the Congo, FPFD in Guinea and CERUDEB/OMIPA in Uganda Intermediation is used to create a climate of trust between two parties and the end result can take different forms, such as a working relationship, the generation of information, a security from a guarantee fund, etc. SIDI has made headway in the use of such guarantees in 2 new countries: Uganda, where a guarantee was issued to facilitate a loan from CERUDEB to OMIPA (see “A SIDI guarantee in Uganda”, page 17); and in the Congo, with a guarantee for CCRD for refinancing solidarity credit unions via COODEFI and in Guinea with FPFD, as described above. Consolidating refinancing funds Profund (Latin America), LA-CIF (Latin America), TEMBEKA (South Africa), New in 2004: MAF (a fund for Southeast Asia) Today, SIDI can draw on its experience, know-how and relations developed in financial management and institutional support of refinancing funds. In April 2004, it brought together in Paris the shareholders of PROFUND3. During that event, SIDI organized an information workshop with the participation of like-minded people in order to share the experience of PROFUND. SIDI’s recognized experience in providing institutional support to refinancing funds led it to take part in the MAF project, a refinancing and technical assistance fund operating in Southeast Asia. CORDAID and CRS, the project’s founders, invited SIDI to take part in the project’s institutionalization phase. This phase is fundamental because it is when the future of the initiative will be decided, i.e. whether or not a legally independent fund, to which the MAF founders will transfer their participation will be created. SIDI’s participation in MAF meant it would be involved in a new initiative, improve its knowledge of the region, and support the financing of new MFIs in association with other investors.
Farmers’ organizations PROFUND is an international financing structure created in 1995 to promote the development of micro-enterprises by consolidating the shareholder equity of MFIs that finance these micro-enterprises in Latin America. See article in the quarterly review Techniques Financières et Développement TFD published by Epargne Sans Frontière, no. 78, March 2005.
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In its 20 years of operations has SIDI succeeded 3. An agreement and specific negotiations in disinvesting in a satisfactory manner in SIDI tries to make sure that disinvestment takes place under the best possible conditions, financial and social terms? not subject to a rigid timetable. The economic conditions, the partner’s operational and SIDI’s disinvestment experience financial autonomy and access to resources, The disinvestments already carried out or are SIDI’s main concerns. underway have three different aspects : At the end of 2004, SIDI withdrew from its 1. Differences of opinion concerning participation in BANCOSOL in Bolivia. Over the mission arise over time. the years, SIDI’s stake had dwindled to 0.87% In a small number of partnerships, the oldest of the MFIs shareholder equity. BANCOSOL ‘s ones, the passage of time may lead to changes emblematic in the world of microfinance and in the original vision. The environment changes name is well-known4. Via a joint operation so do the people concerned - both in the involving two other shareholders, PROFUND partnerships and at SIDI- as also the vision and and ACTIS, SIDI sold its stake in BANCOSOL. the management of operations on the ground. It did so with the assurance that the financial SIDI’s and the partner’s perception of the needs would be taken up and that the mission may no longer be the same. How can institutional mission would continue, thanks cooperation continue in this changing context ? to the quality of the new investors. The This occurred with Rural Capital Partners (RCP) new shareholders are MIBANCO, a Peruvian in Thailand, the SMED in Laos and SERFINDES microfinance bank, other international in Columbia. Thanks to the good historical rela- investors, including Acción Internacional, tionship, SIDI left these partnerships with the Bolivian individuals and members of the agreement of the others shareholders and has management. since continued to enjoy positive exchanges and relations with them. INDES, in Chile, is among the oldest partners of SIDI. This institution was set up as an LIC5, with 2. Predetermined disinvestment the mission of making capital contributions In other cases, such as PROFUND and LACIF in to small and micro-enterprises and to offer Latin America, disinvestment is planned and them technical support. INDES has enjoyed the scheduled in the founding documents. In support of local shareholders, including the the case of LACIF, a credit fund, the end of Fundación para el desarrollo6, Inversiones Norte operations in their present form will cause Sur (INDES)7, as well as individuals. (Continued no difficulties, as loans will be paid back on a on page 14) scheduled date. PROFUND, an investment fund, consolidates the shareholder equity of MFIs1 and works under constraints similar to SIDI’s. However, unlike SIDI, owing to the (i) size and institutional maturity of the MFIs, (ii) the amounts invested and (iii) the statutory requirements imposed by the founding multilateral donors, PROFUND has little room for manoeuvre to extend its duration i.e. investments and investors’ participations. PROFUND began
1 Investment is in full swing: thirteen participations in ten countries, with a total close to US $20 million. 2

July 2005 to June 2006 is the last accounting period. Employee buyouts

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Figures at the end of February 2004: shareholder equity – US $17,678.00; gross amount outstanding – US $89,666.00; number of customers – 59,085.
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Local investment company A fund of the Chilean Catholic church

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A private investment fund that controls the Banco del Desarrollo (BDD), a Chilean commercial bank
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The issues of Disinvestment at SIDI: why and under what conditions?
Five years after it was set up, INDES had spent its equity on participations in various economic projects. In Chile’s relatively sophisticated regulatory environment, INDES would have had to file for bankruptcy, unless fresh capital were available, because it had no regular income to pay its expenses. It was at that time that the commitment of its Chilean promoters demonstrated its value. They took up the challenge to find local financing8 in order to build an institutional dynamism for funding the loan of enterprises (LFS – local financing structure). INDES put together financial products to satisfy the needs of small and micro-enterprises for working capital (shortterm loans) and for a investment (mediumand long-term loans and leasing). Vital logistical support was provided by the Banco Del Desarrollo (BDD), a member of the INS group. As a result, by the year 2000, INDES had succeeded in (i) negotiating sizeable financial support from FOMIN9 for its institutional development, (ii) attracting additional financing with the assistance of SIDI and (iii) turn a profit, a prerequisite for attracting new investors. In 2003, SIDI began the partial transfer of its participation, spread over three years. The new investors are varied. One is an investment fund, Inversiones Norte Sur; another is a European social investor; a group of

Focus

individuals close to INDES has also expressed interest.

For INDES closer ties with INS/BDD a means to broaden its horizons by gaining access to local resources and expanding its operations in the field of micro-leasing. For SIDI, this gradual disinvestment will enable it to redeploy resources towards new partnerships in the area and consolidate the vision of its promoters.

Focus

in terms of weaknesses: • the lengthy negotiations that proved to be necessary between CERUDEB and SIDI in order to set up the transaction. • SIDI is involved in the analysis and follow-up of the financial situation of the institutions it supports, whereas CERUDEB limits its intervention to the minimum, with the existence of tangibles guarantees. • A certain feeling of mistrust on the part of CERUDEB,

the commercial bank, regarding a local organisation • The creation of a collaborasuch as OMIPA. tive relationship between CERUDEB and OMIPA that could … and strengths: take on other forms in the future. • And above all, the mobilisation of local • The absence of any cost repercussions on capital in favour of a microfinance institution OMIPA with regard to the guarantee. that would probably not have access to this • CERUDEB’s acceptance of the interest rate initially capital without SIDI’s guarantee. Only the agreed upon by SIDI, which is lower than the rate future will tell whether or not this relationit would normally apply. CERUDEB also accepted a ship will continue beyond the guarantee provided by SIDI. longer repayment period (three years).

A production and marketing programme for certified seeds with AOPP in Mali
A commitment to rural financing For several years, SIDI has been focussing its efforts on the financing of the rural world, particularly in Western Africa. SIDI has been working in Mali since 2003 with the Association of Professional Small Farmers’ Organisations (AOPP), which brings together more than 140 local small farmers’ organisations and has a membership of almost 800,000.This national federation acts as a proactive lobbyist in the public debate to defend the interests and the future of the rural world in Mali. Rural development requires locally produced seed. AOPP provides services to its members so as to assist them in meeting the challenge of food security and sovereignty, for the whole of the country. Against the backdrop of State withdrawal of support from the agricultural sector, the real challenge today for small farmers in Mali is to have permanent access to a stock of selected and certified seeds. AOPP’s activities in favour of small farmers are driven in this political context and one of its priorities has been to set up a facility to produce improved seed. AOPP has decided to enhance the role played by the producer : to this end, it is attempting to establish a self-sufficient seed production unit that is both viable and sustainable. Groups of small farmers, who were selected and organised beforehand, are multiplying and marketing the improved seed stock produced as a result of the research undertaken. This seed stock improves yields, or shortens the production cycle, so as to limit drought-related risks. The real challenge for AOPP was to contribute to the dialogue between small farmers and researchers, at the same time bringing them closer together in order to ensure that the seed varieties produced really did respond to the needs of small farmers and to make sure that the small farmers are trained in the multiplication of the improved seed stock. On the basis of tests carried out in 2002 amongst several small farmers, AOPP selected 40 small farmers in order to widen its promotion of the improved seed programme, together with SIDI’s support. In fact, in 2003 SIDI broke new ground by joining forces with AOPP in the latter’s efforts to control the production and marketing of the improved, public laboratory-certified seed stock. To this end, SIDI provided a loan of €15,000. This loan was used to finance the first production and marketing season for seeds for four local products that are part of the staple diet in Mali: millet, sorghum, maize and groundnut. Focus on SIDI’s role SIDI undertook an evaluation of this programme in 2004, together with a representative of AOPP. It is true to say that the last seed production season did not meet all expectations in terms of yields, certification, marketing and the achievement of a good level of financial viability. However, the yields had increased substantially compared to previous years. Furthermore, small farmers had committed themselves to the process and taken ownership of it : in indication of strong social viability for any programme. On the basis of recommendations made in the evaluation report, this dynamic process should be further reinforced over the next few years. de and approach and also means that it must have a wide variety of skills (with regard to guiding a project and the development of suitable financial products, etc.). • the financing of agriculture by small farmers’ organisations themselves. Small farmers’ organisations are particularly vulnerable to this issue since they must resolve the problem of financing their own development and their own economic activities, and at the same time they must meet the financing requirements of their members’ farming activities. SIDI’s role changes somewhat with the development of financial instruments for small farmers’ organisations, irrespective of whether they are managed by the organisations according to their capabilities and the possibilities that exist of collaboration with the existing local financing institutions. • Know-how regarding the putting together of financial instruments Rural financing in particular cannot be described solely as the financing of the small-scale trade sector, which tends to be the main objective of the majority of microfinance institutions. The rural and agricultural sector has many financing requirements, and this means that you have to provide a varied and adapted response, developed in consultation with partners.

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From CORFO – a public social development financial institution

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The Multilateral Investment Fund, managed by the Interamerican Development Bank.

The SIDI guarantee scheme in Uganda

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n its 2003-2005 strategic plan, SIDI set itself the objective of developing its financial instruments. The establishment of a guarantee scheme in Uganda in 2004 was a part of this. You may well ask why? The answer is that it was in response to two requests, the first from a commercial bank interested in collaborating with rural entrepreneurs and the second from a local organisation, OMIPA, which required access to refinancing in order to increase its loan portfolio. However, there was another reason, namely that SIDI wanted to develop an innovative approach and to promote operational complementarity between local actors in a country where innovations in the field of microfinance flourish each and every day.

At the outset, there were two Ugandan partners SIDI has a privilegied, long-standing relationship in Uganda with two local institutions: CERUDEB, a national commercial bank that specialises in microfinance, and OMIPA, an organisation of local rural banks. CERUDEB was originally created by the social services of the Catholic dioceses as a local foundation, before becoming a bank in 1994. In 2004, CERUDEB had 22 agencies, more than 52,000 borrowers and 425,000 deposit account holders. SIDI, which has been a member of the Banks’ board since 1997, has always been keen to maintain the social objective of the structure, which is divided between the desire to increase its financial profitability and the wish to provide an innovative range of services to its customer base.

In 2001, SIDI decided to develop a partnership with OMIPA, a rural microfinance organisation located an hour away, by improved road, from Mbarara (300 km south of the capital, Kampala). OMIPA is a network of rural banks and was established as the result of the institutionalisation of a programme run by the international organisation ACORD (of which the CCFD is a member). In January 2002, SIDI provided a loan of US$56,000, over a two-year period, in order to increase OMIPA’s loan portfolio, which is geared exclusively towards the rural population. Thanks to the efforts and motivation of its team and to the will and involvement of its members, over the last three years OMIPA has increased the number of member banks. Indeed, there are now 35 member banks (there were initially 20) and it has been able to maintain a constant growth of its loan portfolio. SIDI’s aim: To bring these two partners closer together In fact, it is quite clear that, given its actions in a remote rural area, the fact that it has a farming client base and a mutualist working method, OMIPA is complementary to CERUDEB. It is also true that CERUDEB has been trying for several years to diversify its actions and portfolio in rural areas. However, the disadvantaged rural populations continue to be difficult customers to manage for a commercial bank, due to the limited volume of business and in lack of collateral. SIDI therefore volunteered to bring

CERUDEB and OMIPA closer together. Indeed, at the time OMIPA’s loan from SIDI was about to reach its maturity and the organisation therefore required a new line of credit. SIDI thus proposed that the loan requested by OMIPA should be made available by CERUDEB, subject to the same conditions originally agreed upon by OMIPA and SIDI. In order to facilitate this arrangement, SIDI secured the totality of the loan, by depositing, in an account with CERUDEB, an amount equivalent to the balance of the loan made available to OMIPA by CERUDEB in Ugandan shillings. In this way, SIDI acts as the guarantor and has assumed a dual responsibility: • on the one hand it is responsible for ensuring that OMIPA has made a good choice, since as a result of this decision it has become a CERUDEB client. The quality of the relationship that SIDI has with OMIPA, as well as the regularity with which scheduled repayments of interest and capital have been made, has meant that it was possible to enter into this arrangement in full confidence. • on the other hand, it is serving 100% of the CERUDEB loan, in case OMIPA fails to make the necessary repayments. The strengths…. and the weaknesses Although it is too early to assess this approach, there are nevertheless several points that deserve to be highlighted,
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• the capitalisation of experience SIDI’s work with AOPP illustrates one aspect of solidarity-based financing and of development SIDI’s commitment to working alongside AOPP work: the need to accompany and work alongside highlights several aspects of SIDI’s role, vocation a partner, including the capitalisation of the proand positionning: cesses and experiences, during the developmental phase of an institution or of a product. SIDI has • the diversity of SIDI’s partners fully appropriated the lessons learnt from this It is this variety that requires SIDI to adapt its attitu- experience, enable to replication in other places.

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A look at SIDI’s core business

Supporting partners
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s well as the provision of financing, SIDI’s core business is to support and to councel its partners. Reflecting on concrete strategic proposals over the long term An organisation’s ability to develop and to adapt is based on its capacity to undertake a critical appraisal, its ability to manage problems and the extent to which it is able to anticipate the future evolutions. This work generally takes the form of prior discussions and dialogue with the Board members, meetings with clients, participation in discussions with the staff, participation in strategic workshops, committees… Participating in the implementation of the business plan For the SIDI team, participation in the implementation of the strategy developed may mean the search for financing sources to foster growth, the search for other potential investors (which was to SIPEM’s advantage in 2004, for example), the analysis of interest rates and costs… For example, the Finance Committee of Al Amana, of which SIDI has been a member since 2003, is currently working on the implementation of financial projections drawn up by the management on the basis of job descriptions, etc. Seeking and mobilising local shareholders SIPEM in Madagascar, HATTHA KAKSEKAR in Cambodia, KRK in Kosovo,TEMBEKA (South Africa) The aim of “good governance” is to ensure that the institution’s social mission is pursued over time. In SIDI’s view, the creation of good governance is rooted in the building of local capacity – both financial (local shareholders) and technical (Board members) (Cf. Focus on “SIDI’s participation in the governance of a MFI in Kosovo”, page 20). In 2004, SIDI lent its support to the efforts made to encourage SIPEM employees to become shareholders in the organisation by helping to draft the statutes and by acting as a guarantor for the process on behalf of CORDAID who provided the resources. Consolidating the governance of MFIS Crédit Rural de Guinée (Guinea), KOKARI (Niger), HATTHA KAKSEKAR (Cambodia), TEMBEKA (South Africa) New in 2004 : TIMPAC (Togo) Governance may be defined as the “process used by the Board of Directors to help an institution to accomplish its mission and to protect the institution’s assets over the course of time (Rock, 1998)”. The governance of MFIs can be a decisive factor in the success or failure such institutions.
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Contributing to capacity building As well as sitting on the Board of Directors, SIDI also strives to reinforce the governance of the institution which means taking into account all the actors involved (employees, management,directors,…).SIDI can organise workshops and training sessions that can help to strenghten governance. TIMPAC, which is a new SIDI partner in Togo, is an excellent illustration of this approach. In order to mobilise TIMPAC’s human resources around the institution’s values, SIDI and the TIMPAC management organised a workshop that brought together all the employees and the Board members for the first time. The mission/vision of a MFI is underpinned by a set of values that must be shared and used to inspire the way in which everyone goes about their work on a daily basis. The positive effects of this process is cohesion and mobilisation of the team. Participating in the creation of a genuinely committed Board of Directors. From a governance point of view, Kokari, which has been a SIDI partner since 2000, is incorporated as a service co-operative. Under the terms of this statute its members and directors are the employees.Although this statute serves to avoid a potential conflict between a group of employees and the elected representatives, it is somewhat limited in that a Board of Directors formed in this way does not include any outside members. SIDI and Alterfin became members of the co-operative in 2003 and now have a seat on the Board. In Guinea-Conakry, the Crédit Rural de Guinée is present across the country and has 100,000 customers. These customers are all members of the institution because the CRG chose to involve both its customers and its employees in the management of the bank and in the governance of the institution. Together with IRAM and the State of Guinea, SIDI is a director within the third college of directors, whose members are drawn from external partners who are able to contribute an indispensable external vision. In Niger, just like in Guinea, SIDI is playing a role in the creation of a Board of Directors that is a real protagonist in the life of the institution, in other words a Board that is capable of taking well informed decisions in order to steer the institution in the right direction. Alongside IRAM, SIDI has set up a system attended by all the directors (most of whom are small farmers) in the absence of the management, so that they are able to work together on documents to be discussed at the Board meeting (financial accounts…). SIDI’s support for the governance of the MFI itself, alongside other institutional partners (such as Alterfin, Cordaid,

Participation in the Board of Directors of the following local financing structures (CFSs) Profund, Lacif, Sipem (Madagascar), Confianza (Peru), AMRET and HATHHA KASEKAR (Cambodia), Fonds Coopératif (Laos), KRK in Kosovo, CERUDEB (Uganda), Al Amana (Morocco), CRG (Guinea), KOKARI (Niger) In 2004, SIDI was invited to sit on the Board of a new partner, the Caja Rural San Martin (Peru). Participation in the capital of a MSI is SIDI’s preferential form of investment, since it is the expression of a highly committed form of solidarity: a long-term commitment (8 to 10 years), the absence of financial costs for the local institution… When SIDI participates in the capital of a MFI, it asks for a seat on the Board. In this way it undertakes to attend regularly the Board of Directors’meetings (these meetings take place between 2 and 4 times a year). SIDI therefore has to deploy the necessary skills to actively play its role in terms of guidance, supervision and regulation of the management of the organisation. The time and the funds invested in this function are part of the investment made in the services provided to partners. In concrete terms, being on the Board of Directors of a MFI means the following for the SIDI team (desk officers, the Director or the volunteer consultants who are frequently called upon to perform this role since they have experience in this area and are prepared to make themselves available for this purpose): Monitoring and advisory services This monitoring function relates to both the financial and operational performance, as well as ensuring that the organisation continues to respect its vision and social mission, the social audits, the way in which the budget is followed, the portfolio…It is essential so as to be able to: • be responsive to the management’s concerns. • anticipate risks and propose solutions. • effectively undertake the Board of Director’s mission of monitoring the MFI.

GRET, IRAM…) helps to reinforce the solidity of the MFI. It also allows SIDI to accompany the institution in the course of a period in which it is growing quickly and is called upon to perform many tasks. Contributing to the monitoring of the portfolio and the methodology used to grant loans Monitoring the development of the portfolio Wages (Togo), Kokari (Niger), AMSSF (Morocco) Monitoring the portfolio of outstanding loans (in terms of their number, amounts, per agency/bank, quality…) and of the savings collected represents an essential aspect of the solidity of a MFI. For this reason, it represents an important part of the monitoring carried out by the SIDI team. In 2004, SIDI endeavoured to work on the articulation that exists between the achievement of financial viability by AMSSF in Morocco and the maintenance of the quality of services (in particular through an analysis of the reduction in the interest rates applied). With Kokari in Niger, on the basis of a business plan drawn up by an external consultancy, SIDI focused its efforts on an analysis of the financial stability of the institution, taking the product portfolio as its starting point, so as to gradually establish a degree of autonomy with regard to subsidies from external projects. In Togo, which is caught up in the urgency of

Coffee’s producers, Fapecafes, Ecuador..

An AMRET client, Cambodia.

Photo FAPECAFES.

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Photo AMRET.

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A look at SIDI’s core business

Identifying partners, the search
for finance and mechanisms to cover risks, analysis of
efficiency and profitability often imposed by external financial institutions, WAGES has achieved excellent financial results, but in order to do this they had to adjust their portfolio and exposed themselves to higher risks. SIDI is currently looking at this situation with WAGES with a view to maintaining the initial vision of the institution and ensuring that the development of portfolio is in conformity with it. Creating financial products for rural communities UGPM (Senegal), TITEM (Madagascar), MUSO in the Great Lakes Region, MUSO training in Mali, IMOFOR (Haiti) Over the last few years, SIDI has done a significant amount of work in respect to the creation and promotion of financial products that are customised to meet the needs of isolated areas and that provide access to financial services and the involvement of the loan beneficiaries in the management and monitoring of the savings and loans operations, so as to reduce the costs: the solidaritybased mutuals known as MUSO4. In addition to providing regular financial support to its partners who have developed the MUSOmodel, SIDI also completed the MUSO training guide in 2004. SIDI used this guide to train AOPP members in Mali and to assist in setting up solidarity - based mutuals in the landlocked rural areas of Mali. Furthermore, SIDI is also involved in the creation of financial products that are tailored to meet the needs of the rural communities: with TITEM in Madagascar it has helped to create a product that takes the form of Village Community grain banks.The extension of this product to other areas has been helped by support from CCFD and the SAHA programme of Intercoopération Suisse. In Senegal, where rural financing is the main focus of SIDI’s work with UGPM, SIDI has collaborated in the production of brief studies on village farms, to better understand the linkages between the resources of a village family and its economic and financial plans.
Photo SIDI.

social viability
Photo SIDI.

their efforts. This requires the deployment of several skills that touch upon different aspects of the management of MFI. Thanks to the financial autonomy that SIDI enjoys, the sustainable and flexible nature of our relationships, plays a decisive role in our network of partnerships and in the relationship of mutual trust that SIDI promotes with its partners. Providing management support : accountancy, audit, creation of monitoring tools, human resource management Producing tools to monitor the portfolio: Kokari (Niger), MUSO in the Great Lakes Region, UGPM (Senegal), FONHSUD (Haiti), FENACOOP (Nicaragua) In 2004, SIDI devised a portfolio monitoring tool called MUSO SIG, which is an Excel-based tool designed to guide a group of 300 MUSO over a period of approximately 10 years. It also created a portfolio monitoring tool for KOKARI and FONHSUD and worked on producing software to analyse family farms in Senegal, now used by UGPM. Performing audit missions and providing accountancy support Fonds coopératif in Laos, Kokari in Niger In Laos, SIDI is supporting the introduction of an accountancy function that will make it possible to track loans and monitor expenditure, on the basis of reliable data, so as to consolidate the network of CCSPs. This is an essential activity for several reasons: to support the transparency of the accounts, to detect and to understand the causes of problems related to defaulted repayments, to train the staff, to allow for innovations to take place. Accompanying the training of human resources CRG (Guinea), HATTHA KASEKAR (Cambodia), Fonds Coopératif (Laos) The reinforcement of the solidity of a MFI requires a clear division of responsibilities and of powers,as well as positive incentive schemes (bonuses, promotions) and deterrent schemes (sanctions), all of which must be both adaptable and applicable. Along the lines of what it has done with the CRG, SIDI can make its skills available to support the MFIs’ in their efforts to reinforce their human resources and remuneration policies.
A solidarity based mutual is a group of people who know each other and decide to pool their resources with a view to converting the sums of money collected into loans they then make available to the members. These mutuals have a simplified management system based on three different coloured boxes (green, red and blue).
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Identifying partners

New partners were sought in 2004 in Egypt (in close collaboration with CCFD), in Nicaragua (also with CCFD), in Benin and in Togo (with Alterfin), in Burkina Faso, in the Great Lakes region (linked to the Great Lakes strategy that is being carried out with CCFD), in Haiti (in the mango sector), in Moldavia, in Mali (Banque Malienne de Solidarité).
The desk officers spend a considerable amount of their time (approximatively 25%) identifying and appraising new partners to respond to the partnership requests received by SIDI or requests to establish alliances. This work takes place either in the new countries SIDI is now working (pursuant to our strategic plan or linked to an alliance), or in the countries where SIDI is already working so as to give concrete expression to our “multi-partnership” strategy. There is a cost element for SIDI in this identification work, which covers both small and large initiatives, and we should bear in mind that it does not always lead to the establishment of a financial or technical partnership. The identification work initiated by SIDI in Egypt was carried out following its participation in the second annual meeting of SANABEL, a microfinance network for Arab countries, that was held in Cairo from 6 to 8 December 2004. Once it had completed an information-gathering analysis of the country’s socio-economic situation and of its microfinance sector, SIDI became acquainted with partners from the Egyptian civil society supported by CCFD, as well as with partners supported by other international development bodies (Cordaid, CRS…) and was able to establish initial contacts with the institutions in Egypt. The mission it is due to undertake in 2005 will enable SIDI to carry out a financial, economic and social diagnosis according to the parameters established by SIDI, for these institutions. The search for financing and leverage for our partners A significant part of the work of the desk officers, with the support of the team specialised in this area, is dedicated to the search for sources of complementary financing for SIDI partners (cf. Chapter III, page 23).

The search for mechanisms to cover risks: the financing of partners in crisis areas: ACAD in the West Bank, NAJDEH in the Lebanon, the Great Lakes region, Haiti, Colombia. Not only do the conflicts that these countries are faced with have disastrous consequences in human terms, but they also have an impact on the way in which the microcredit institutions operations . The context within which work is carried out with the MFIs in conflict zones (Lebanon, Palestine..) as well as in politically unstable areas (Great Lakes, Haiti, Colombia), means that the working methods must be adapted accordingly and this generally requires the creation of local, solidarity - based financial tools (cf. Focus on “SIDI’s work in a conflict zone”, page 21). The incentive fund (FID), that was created in 2000 following joint reflection and discussions between the CCFD, SIDI and the religious congregations that are SIDI shareholders, is able to cover the main risks incurred by solidarity investors, in relation to the economic and political conditions of the country in which the intervention takes place. Analysing social viability In 2004: UGPM (Senegal), Peru (la Florida), Guinea (CRG) Since 2003, with the introduction of a new function within its team and as part of its efforts to reinforce its solidaritybased approach, SIDI has started to analyse the social viability of its partners.This work is led by a staff member specialised in this area and is carried out in co-ordination with other members of the team (cf. Chapter III, page 24).

Market scene, HaÏti.

MUSO training organised for AOPP in Mali.

With TITEM in Madagascar UGPM in Senegal, HATTHA KAKSEKAR in Cambodia - for whom we have a technical support contract with AFD - TEMBEKA in South Africa, KOKARI in Niger… SIDI has committed itself to accompanying these institutions in

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SIDI’s participation in the governance of a CFS in Kosovo

T

Focus

Focus

SIDI’s work in a conflict zone In the Lebanon and on the West Bank
For many years, SIDI has recognised the involvement of the local actors who are working in occupied Palestine with Palestinian refugees, to enable the families to live on the income they generate through their work, both in urban and rural areas. A fraught everyday life in a conflict zone The last four years have been very difficult in the Palestinian territories.The intifada1 is an evidence of anger against the occupation, the violence to which the people have been submitted, the confiscation of land, the denial of sovereignty and the daily humiliations. The response to the intifada has been the construction of an 8 metre high wall that further isolates the Palestinian people and pushes back their land, using security as a pretext… Not all Palestinians have left their country, even though the majority of them live in Jordan, in the Gulf States, in camps in Lebanon or even further away. On the West Bank and in the Gaza Strip, the inhabitants have to live on the income they generate through the work they are able to carry out where they live, since working as a labourer in Israel is only to be considered a far from satisfactory stopgap. The NGOs are working hard to keep the socio-economic fabric as active as possible.Amongst these NGOs there are local financing structures, such as ACAD, offering loan and credit services to small producers and to the emerging savings and credit co-operatives. We often hear people say “why are you involved in microfinance in Palestine? It is impossible!” It is certainly difficult, but organisations such as ACAD or ASALA have shown how determined they are to continue their activities, even in the face of the “check points” which disrupt and delay economic flows, despite the wall that has been built that obliges people to go on long detours, despite the pot-holed and worn roads which link Jerusalem with the many plantations on the West Bank. Although everyday life is fraught and difficult, it nevertheless goes on, the people take initiatives and put together requests for loans. SIDI has entered in another difficult, but worthwhile, commitment alongside NAJDEH in the Palestinian refugee camps located in the south of Lebanon. SIDI has been providing financial support and accompanying services since 2000. The project, which was launched by NAJDEH on the basis of CFSI2 funds, will have provided services to 317 clients by the end of February 2005 with outstanding loans of $US60,000. The project has managed to obtain further donated capital and hopes to increase its client base to 700 by the end of 2005 with outstanding loans of $US110, 000. It also plans to extend its services in the Beqaa valley villages in order to provide services to groups of refugees and to the disadvantaged Lebanese people in the area. It almost seems superfluous to point out all the constraints with which the refugees are faced: they are banned from undertaking 76 professions, they are not allowed to buy property, there are constraints regarding succession procedures between Palestinians and Lebanese in the case of mixed marriages, they experience difficulties in obtaining a visa to return to Lebanon after a trip abroad… Life in the camps is extremely difficult: over-population, lack of basic infrastructures, deterioration in the quality of education, shortage of jobs, an economy which is vulnerable to the vagaries of the army which may decide to close access to the camps during periods of heightened tension… However, the major constraint is perhaps the psychological impact of an exile that has been going on now since 1948, of the confrontations with the host populations in the not too distant past and the hypothetical future compromise: the right to return, what will the outcome be? The entitlement to rights in the host country, when will that happen…? that not all small businessmen are able to provide. Both SIDI and ACAD are working on the creation of a financial guarantee mechanism that will facilitate the intervention of other forms of solidarity. • Ensuring that the services continue to be provided over time The feeling of insecurity surrounding the possible resumption of combat makes it difficult to plan anything. If the institutions function like NGOs, then it will be impossible to guarantee the longevity of the services that is expected of them. This means that they must become institutionalised, in other words they must convert themselves into a legal entity whose statutes are coherent with the activities they are involved in.This not only requires a change in the legal framework for the microfinance sector at the national level, but it also requires a redefinition of the operational aims that have to integrate what has now become a structural crisis. Credit agents must do their utmost to meet with the needs of their clients and must closely monitor them, through an improved and organised contact scheme, so as to be able to anticipate changes to the context.

he KRK (Kreditimi Rural i Kosoves), a microfinance institution dedicated to rural financing in Kosovo, began its work in 2004. A partnership with ADIE International A short while after the end of the war in 1999, re-launching the economy of Kosovo was a matter of utmost urgency and this was particularly the case for the agricultural sector which employs 60% of the active population. The European Agency for Reconstruction (EAR) entrusted ADIE International with the task of setting up a microfinance programme called the RFPK (Rural Finance Programme for Kosovo). ADIE International is a subsidiary of ADIE, which is a microfinance institution that works, in France. With the financial support of the EAR, AFD1 and SIDA2, ADIE International developed an original system based on a network of credit associations that brought together several villages and hundreds of

inhabitants. A credit committee elected amongst the associations. KRK’s credit agent has a seat on this committee with the power of veto. The committee has the task of evaluating the moral integrity of the borrower and his/her position within the village community, whilst KRK’s credit agent analyses the financial and economic aspects of the project. This dual evaluation scheme, which covers both social and technical aspects, guarantees the quality of the promoters and of the projects, since the risk portfolio (> 30 days) is only 0.2 %. More than 50 % of the loans are for amounts less than €2,000 and this also serves to highlight KRK’s vocation to provide financial products to people who receive a modest income. By the end of 2004, KRK had financed 26 associations which in turn granted 3,800 loans for a total amount of almost 4 million Euro. 2004 was also the first year of financial autonomy, since KRK was able to generate a net profit of €65,000.

Given the small scale of the territory covered and the dense banking network, all payments are made through the banking system, thereby limiting the physical transfer of funds. Since the very outset, the aim has been to promote an autonomous microfinance institution. The idea of creating a joint-stock company has rapidly gained ground in this context. In 2003, ADIE International contacted SIDI so as to assess the extent to which SIDI could participate in the institutional conversion of the RFPK programme into a registered autonomous entity. SIDI was asked to become a shareholder of KRK, together with ADIE International and FIEK, the federation of credit associations. The quality of the work carried out, the good financial results achieved and KRK’s mission to provide loans to the most modest households quickly persuaded SIDI to take a €25,000 stake in KRK’s capital, to place it on an equal footing with the other two shareholders. SIDI’s involvement in the strategic definition of the challenges faced by KRK SIDI’s strategic objective is to accompany KRK’s development in the medium term so as to consolidate its equity and to enable the development of the institution on a good foundation to facilitate the gradual tranfer of control to FIEK and to support KRK in the diversification of its financial products. Most of SIDI’s support is designed to ensure the regular monitoring of all activities, including back - office activities, in close collaboration with ADIE International. This technical support takes the form, in particular, of participation in the strategic guidance of KRK, ensuring that KRK establishes contacts with other financial institutions and supporting KRK in seeking and negotiating new lines of refinancing. SIDI also provides support in the field of communications and in this area it has helped to draw up the activity report, set up a website and produced a CD-ROM for promotional purposes.

KRK’s customers in Kosovo.

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AFD : French Development Agency SIDA : Swedish International development Agency
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From time to time the tension is eased as a result of a cease-fire and then hope returns and people begin to dream of a sovereign State that may, as is the case everywhere else, guarantee its authority and create the supervisory bodies of the financial institutions in general and of the microfinance secGiven that the political situation in Lebanon is han- tor in particular. ging by a thread and that the Lebanese economy is in total disarray, the refugees are left waiting and • The impact of micro-credit are keeping as low a profile as possible so as not to In a context in which even the informal Lebanese be taken hostage in internal conflicts or in foreign sector appears to be on its last legs and in which a efforts at destabilisation. feeling of insecurity reigns on the West Bank, clients are not necessarily sufficiently motivated to take out loans. Figures in Lebanon show that the The offer of loans that signals project has a fairly limited scope. However, the a commitment to solidarity project does play an important role since it proAs well as having disastrous consequences in vides access to employment and gives people a human terms, destroying physical and social capital, small element of dignity and hope. these conflicts also have an impact on the way in which microcredit institutions are able to function. Whilst waiting for further developments, these Supplying local financing services in this context local organisations believe in the need to develop means that the institutions have to adapt and financial services by becoming part of the Solidarity review the ways in which they function with regard Chain for Financing with SIDI, which has decided to important issues such as: to maintain its support, in spite of the crisis. Indeed, it is SIDI’s original nature and profile that • Securing credit endows it with the institutional and financial indePhysical guarantees are hard to achieve and in any pendence to undertake and assume this choice. case turn out to be insufficient. Personal guarantees must be set up, such as the endorsement by an Popular uprising involving stone throwing. employee in the formal sector, which is something French Committee for International Solidarity
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Photo SIDI.

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SIDI’s institutional life

Mobilising the solidarity chain to exchange, innovate and capitalise
Taking part in the life the networks
SIDI’s approach in favour of the sustainability and diversity of MFIs means that networking is one of the fundamental priorities of the professionalisation of MFIs, at both a technical and institutional level. SIDI is an active, founder member of the African network MAIN that was created in 1995 and that is today acknowledged as being an important actor on issues regarding capacity-building within MFIs (cf. Insert n° 1 “Extract from the MAIN evaluation carried out in 2004”). SIDI participates in the institutional development of the network and provides support for seeking ressources, training programmes… Indeed, 2004 was a year of transition for MAIN: following its 2001-2003 programme, an evaluation of its activities was carried out amongst its members and financial partners. In 2004, it also provided two training sessions for the African professional and managerial staff involved in microfinance (one session was for English speakers and was held in Uganda at the UMU1, whilst the other session was for French speakers and was held in Abidjan in partnership with CAMPC2). Other activities included a preparatory workshop for the seminar on the impact of microfinance which is due to take place in 2005 in Yaoundé and a South/South exchange between two network members (TEMBEKA and SIPEM) on the subject of the financing of housing in South Africa. SIDI has also integrated, within its group of actors, the solidarity-based financing networks from other continents, such as FORO-LAC3 in Latin America, SANABEL – a microfinance network of the Arab countries and the MFC, a microfinance centre for Eastern Europe and central Asia. In the North, SIDI is member of FINANSOL4, of Epargne Sans Frontière, of INAISE5, a European social economy network, and of the FEBEA6. SIDI’s support for networks was further reiterated in 2004 by the organisation of a seminar in Asia7 that took place in Phnom Penh in Cambodia from the 15 to 18 November. This seminar brought together 65 participants from MFIs in the region (Cambodia, Laos, Vietnam, India, Indonesia, Philippines), who are partners of SIDI, CCFD and others. SIDI organised this seminar in collaboration with its two local partners, AMRET and HATTHA KAKSEKAR and benefited from the assistance and financial support of: AFD Cambodia (through its PASMF8 programme), Insert n° 1: Extract of the MAIN evaluation (evaluation report prepared by SOFI (Belgium) and IRED (Zimbabwe) “ The MAIN network is one of the largest networks of African MFIs. If we count the number of direct members then we could even say that today; MAIN is the largest network in Africa. Out of its 57 members, 51 are African MFIs. The specificity of MAIN in terms of membership • The MAIN members are diverse in nature since they include MFIs, credit co-operatives, universities, investors. This is certainly an advantage and promotes complementarity. From a geographical point of view, the members have a wide variety of origins and are both French and English speaking. • The majority of the members are medium-sized organisations . Generally speaking, the MFI members rely heavily on local savings, are sensitive to the need for viability and are customer- driven. The specificity of MAIN from the point of view of its actions By its very nature and the duration of its training sessions and its sectoral seminars, MAIN strives to
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MISEREOR, CORDAID and the RAIFFEISEN Foundation made financial contributions for the organisation of this seminar. Thanks to the excellent relations maintained, SIDI was able to call the support of the Cambodian National Bank, whose General Manager accepted to open the seminar, as well as participants from the Rural Development Bank.

Les participants du 5ème séminaire Asie, Cambodge.

Seeking leverage for our partners
In 2004, almost €345,000 of financing was mobilised through the alliances we have forged to accompany our partners in Laos, in Africa (for the MAIN network), in Haiti, in the Great Lakes region, in Madagascar, in Palestine, in Uganda for the organisation of a workshop. AFD, MISEREOR, DGRV and CORDAID also made more than €30,000 available for the organisation of the fifth Asian seminar. A further €564,000 in supplementary resources should be added to these co-financing amounts. These additional resources are the result of SIDI’s lobbying of its alliances and the funds are granted directly to the partners. facilitate the assimilation and adaptation of microfinance practices within the reality of the African setting. This applies both to MAIN’s practices and to the training it organises, particularly the sessions provided by the UMU. Not only is this programme designed to continue over a long period of time, it has also become a reference point in its own right across the African continent, through the development of a programme that leads to a certification. MAIN is a learning organisation and is not merely a vector for the transmission of external knowledge. Its programmes are designed as a response to the needs expressed by its members. The thematic specificity of MAIN It is the sheer variety of these topics and their transversal nature, that is one of the main features of the MAIN training programmes and seminars. MAIN has developed a substantial training programme over the last three years. It organises three or four annual events, mobilising between 100 and 200 MFI professionals. There is no doubt that this is one of the most well - developed programmes on the African continent”.
Photo SIDI.

The SIPEM team and the Managing Director of TEMBEKA face to a catering activity financed by TEMBEKA during an exchange organized by MAIN in South Africa.

Graph 3: geographical breakdown of financial resources mobilized in 2004 via alliances. Mobilized amount : 1 104 757 €

Caribbean 1% PECO 4% Mediterranean basin 2% Asia 13%

France 0%

Africa - MAIN 21%

Africa 24% Latin America 26 % CCFD Congregation of the Sœurs Auxiliatrices Congregation of the Sœurs Ursulines de Jésus Total contributed by the Pact of shareholders AFD Caisse des Dépôts et Consignation Crédit Coopératif SICAV Nord Sud Développement Société Coopérative Autonomie et Solidarité Total contributed by the financial institutions Association Epargne Solidarité Développement ALTERFIN (Belgium) CORDAID (Netherlands) OIKOCREDIT (Netherlands) OIKOS (Denmark) Total contributed by the European partners Others (associations, foundations…) TOTAL 30,67% 18,02% 10,03% 58,72% 3,14% 4,29% 1,00% 1,14% 0,29% 9,86% 24,42% 1,43% 2,13% 0,09% 0,25% 3,90% 3,07% 100%

Table 4: breakdown of SIDI’s capital at December 31, 2004

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SIDI’s institutional life

The main beneficiaries in 2004 were the MAIN network, Microfund and Timpac in Togo (Alterfin granted loans to these two institutions), the Co-operative Fund in Laos, OMIPA in Uganda (thanks to support given by SCAC Uganda). Finally, more than €195,000 of financing was negotiated for specific missions carried out by SIDI at the request of its alliances and of its partners (missions in Benin for a French NGO, in Eritrea and Nicaragua for CCFD, in Mali for the Coopération Suisse, in South Africa for Solidar’Monde, in Kosovo for ADIE, in Haiti for the KNFP, in the Ivory Coast and in Uganda, as part of the training sessions organised by the MAIN network, etc.). In total, in 2004 all of these efforts at leveraging supplementary funds raised more €1.1 million, 45% of which was used in Africa (cf. Chart n° 3). The links created by SIDI with European institutions that share its vision of solidarity - based financing, such as Alterfin in Belgium, Cordaid in the Netherlands, Oikos in Denmark, MISEREOR in Germany, continue to grow stronger. A collaboration agreement was signed in September 2004 between SIDI and CORDAID, so as to provide an institutional framework for the various partnerships which are jointly supported in the countries in which both organisations operate (Mali, Haiti, Madagascar, Senegal, the MAF regional tool in Asia…).

today the local and international actors who provide support to this sector are asking the MFIs to explicitly state their approach to social viability and to explain how they reconcile, at the same time, social objectives and the aim of financial sustainability. SIDI’s approach to capitalisation and the progress it has made in this area has not only been welcomed, but also embraced by partner MFIs and international operators. A specific position The concept of social viability focuses attention on the social dimension of our activities with our partners and more particularly on sustainability of the impact and the social changes engendered. The work undertaken around the notion of social viability is not based on SIDI’s needs and expectations, but rather on those of our partners. SIDI believes that it is important that the actors on the ground have social objectives, that they be aware of the changes in people’s lives and what they want to change, not as a justification to the external partners, but so as to assess the social relevance of their action and to be able to adjust their strategies accordingly. An experimental approach in three countries The approach to social viability may take different forms according to the country, the partner and the context within which the intervention takes place: • In Senegal with UGPM. With SIDI’s support, this partner adopted a social viability approach to assess whether the work on family farms could contribute to reducing the negative effects of having to make ends meet and of indebtedness to money-lenders, a position which people often find themselves. This work consists in the preparation of small studies and logbooks regarding the family farms that have received a loan. • In Peru with CAC la Florida, an organisation of coffee producers that is heavily involved in local development activities. In both its mission and vision, this organisation focuses on the integration of young people, so as to ensure the sustainability of its activities and to ensure appropriations by future generations. Their work on the issue of social viability is being carried out along the lines of a diagnosis and a
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typology of clients, at three levels: the family farm, the co-operative (its social role) and the region (the articulation between local development services provided by the co-operative to the region and their invoicing). • In Guinea with the Crédit Rural de Guinée. From its very beginning, this institution has always applied a firmly expressed social mission: interventions in isolated rural areas, the provision of products to the most marginalised rural communities, equalisation mechanisms between the various rural banks so that the CRG can contribute to those that are unprofitable… On the basis of indicators already produced by the CRG, the social viability approach is now being developed to identify the relevant indicators that are the most likely to provide an understanding of social viability.

The Solidarity Chain in action In November 2004, twenty shareholders and subscribers gained first hand experience of a series of exceptional meetings in Senegal. Thanks to an excellent preparation of their visit, the quality of the relations that exist between CCFD and SIDI and their partners and the excellent service provided by “Voyager Autrement”, the participants were able to meet actors on the ground at a local, regional (meeting of the USE, of the Fenagie, of the SAPCA EGAS, of UGPM) and national level. The visitors were impressed by the welcome they received9 and by the receptiveness of all concerned. Upon their return they were very keen to report on what they had discovered by organising meetings that serve to reinforce the support for financial solidarity introduced by SIDI.

Savers and shareholders who express their solidarity: the life of the Solidarity Chain in the North
Solidarity investment Since the last increase of capital in October 2001, the ESD (Savings, Solidarity and Development) association has sold more that 1,500 shares to individual shareholders, thus promoting the enlargement of the number of actual individual shareholders who support SIDI’s activities. Solidarity-based savings The regional correspondents of SIDI/CCFD, who now total 25 in number, continue to promote the Mutual Fund known as “Hunger and Development”, together with the Diocesan Committees of CCFD. The Fund’s shared product helps to finance services and technical support provided by SIDI. A “Correspondent’s Charter” has been drawn up and highlights the aims (informing people about solidarity financing and increasing its value), requirements (to be trained, to share the same convictions) and the means made available (promotional material, videos…). At the end of 2004, the outstanding amount of the “Hunger and Development” Mutual Fund, managed by the Crédit Coopératif, stood at €49 million provided by 5,000 subscribers, with €520.000 resources shared.

1 2

UMU: Ugandan Martyrs University African Centre for the Management and Improvement of professional and managerial staff The FORO-LAC is a grouping of national networks in nine Latin American countries FINANSOL is the French umbrella organisation of solidarity-based financing International Association of Investors in the Solidarity Economy European Federation of Ethical and Alternative Banks http://www.sidi.fr/asie/index.html Support Programme for the Microfinance Sector. Issue 15 of InfoSIDI will carry a report on the richness of these meetings A meeting with a MUSO, UGPM in Senegal.

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4 5 6 7 8 9

Moving towards social viability
Since the SIDI workshop in October 2001, the Solidarity Chain for Financing has been engaged in a reflection in the “social fecundity of its investments” in order to better understand how our investments contribute to the well-being of the populations that benefit from financial services. This approach has provided us with the working basis to introduce considerations on “social viability and development” within our team and in our relations with our partners. The real challenge lies in linking this to SIDI’s core business and that of its partners, as well as the latter’s understanding of SIDI’s core business. Whilst in the 1990s the efforts to guarantee the continuity of the MFIs were focused on issues regarding financial and institutional viability,

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Photo SIDI.

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SIDI’s institutional life

SIDI’s financial statements in 2004
SIDI’s financial statements as of 31 December 2004 in thousands of euro ASSETS
Unpaid subscribed capital Net intangible assets Net tangible assets Net financial assets Of which shares and claims Of which loans Of which other financial assets - Provisions on shares and loans Total fixed assets 1 138 4 586 2 663 1 893 86 - 56

2004

2003
22

2002 LIABILITIES

2004

2003

2002

Cross portfolio as of 31 December 2004 in thousands of euro
Country LEBANON MAROCCO MAROCCO Mediterranean basin SOUTH AFRICA CONGO MADAGASCAR MALI MALI MALI NIGER UGANDA UGANDA SENEGAL SENEGAL TOGO TOGO TOGO GUINEA GUINEA TANZANIA TANZANIA Africa HAÏTI HAÏTI HAÏTI Carïbbens CHILE COLOMBIA COSTA-RICA ECUADOR ECUADOR URUGUAY PANAMA PERU PERU PERU PERU Latin America CAMBODIA CAMBODIA LAOS PHILIPPINES VIETNAM VIETNAM Asia KOSOVO POLAND Europe Total portfolio in €K % of total Partner NAJDEH AMSSF AL AMANA TEMBEKA COODEFI SIPEM AOPP JEMENI NIAKO KOKARI CERUDEB OMIPA UGPM SAPCA/EGAS MICROFUND TIMPAC WAGES CRG FPFD SELFINA AKIBA FONHSUD CCG/INDEPCO COD-EMH INDES CONSOLIDAR PROFUND BANCO SOLIDARIO FAPECAFES SAINDESUR LA-CIF CAJA RURAL SAN MARTIN CONFIANZA EDAPROSPO LA FLORIDA EMT HATTHA KAKSEKAR FONDS COOPERATIF MAF CEP WUSOP KRK TISE 115 79 135 165 81 109 102 100 96 104 100 285 77 38 30 4 149 153 236 15 152 46 19 25 137 61 38 76 136 18 45 224 1 118 Equity investments Loans 27 100 220 347 197 Total portfolio at 31/12/2004 27 100 220 347 350 236 15 152 46 22 438 25 137 61 38 76 136 18 45 224 2 020 24 89 98 210 115 79 135 165 81 109 102 100 96 104 100 1 186 54 128 188 157 30 4 561 25 111 136 4 461 100% Granted guarantees as of 31/12/2004

156 3 875 2 479 1 475 - 79

Capital 5 320 5 320 5 320 441 Balance carried forward 0 -319 -397 Provisions for risks and exceptional charges 107 Profit/loss for the year 102 426 78 41 Total equities 5 529 5 427 5 001 2 801 2 317 Provisions for risks and exceptional charges 160 98 127 1 055 -571 Loans for activities Other debt 3 282 F.I.D. Internal guarantee fund C.D.C. funds CCFD guarantee 1 101 5 477 9 860 TOTAL 482 1 102 2 592 328 358 451 756 2 592 320 432 516 805 2 592 313 507

5

4 725 4 054

3 438

Claims (net value) Cash assets TOTAL

1 267 872 4 558 5 150 10 549 10 076

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10 549 10 076 9 860

SIDI income statement as at 31 December 2004 in thousands of euro
Income Total Services (CCFD and additional financing) Other products and provision reversal Charges Total Current operating charges Wages and salaries Depreciation expense Additional financing transferred to partners Operating profit/loss Income Total Income from portfolio (loans and shares) Income from current assets FID resources Exchange rate gains Provisions reversal Charges Total Provisions for risks on shares and loans Interest on loans Loss on loans Conversion rate adjustment Exchange rate losses Other charges Financial profit/loss Exceptional income Exceptional charges Exceptional profit/loss Income taxes Net profit/loss 2004 1 653 1 496 157 1 856 648 939 64 206 - 203 369 214 16 111 0 27 130 25 25 5 62 13 238 304 236 68 2 102 2003 1 581 1 502 80 1 730 588 868 21 254 -149 796 120 44 87 1 544 185 18 5 140 23 611 25 19 6 41 426 2002 1 340 315 25 1 492 548 737 16 190 - 152 518 91 67 86 10 264 362 135 29 13 51 134 156 102 28 73 78

50

902 24 89 98 210

109

901 54 51 150 157

“SOFIDEEC BAKER TILLY Agency, external auditor, member of the Paris CRCC, represented by his chairman, Mr Fouad EL M’GHAZLI, certified without reservations financial statements of SIDI for the fiscal year ended December 31, 2004”.

412 25 111 136 2 568 58%

1 893 42%

109

N.B.: the book value shown in this table includes currenty differentials

N.B.: participation in european institutions are not reported in this table

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Adress book
AFRICA
MAIN Abidjan Offices -Ivory Coast 20 B.P. 1359 - ABIDJAN 20 Addis Ababba – Ethiopia Offices P.O. Box 278 - Addis Abbaba E-mail : mainafrica@aol.com / fantaw@telecom.net.et SOUTH AFRICA - TEMBEKA P.O. Box 13859 Mowbray 7705 CAPE TOWN – South Africa Phone : 00 27 21 447 81 38 Fax : 00 27 21 447 81 38 E-mail : tembeka@metroweb.co.za BURKINA FASO – MUFEDE Immeuble Le Walkoye Avenue de la Résistance du 17 mai Ouagadougou Phone : 00 226 318 827 E-mail : mufede@senatrim.bf GUINEA – Crédit Rural de Guinée B.P. 3790 Conakry Phone : 00 224 41 35 71/45 43 38 Fax : 00 224 41 12 78 E-mail : crg@mirinet.net.gn GUINEA – Fédération des paysans Producteurs du Fouta Djalon BP 52 PITA Phone Inmarsat :00 870 762 638 770 Fax Inmarsat : 00 870 762 638 772 E mail : fede.fouta@mail-agriculteur.com www.paysansdufouta.org MADAGASCAR - SIPEM Immeuble SANTA LOT V 24, rue Naka Rabemanantsoa Antanimena B.P. 8616 Antananarivo 101 Phone : 00 261 20 22 300 98 Fax : 00 261 20 22 355 34 Email : sipem@wanadoo.mg MADAGASCAR - TITEM Lot IVM 7 - Ambodivona B.P. 1291 Antananarivo 101 Phone : 00 261 20 22 658 67 Fax : 00 261 20 22 658 67 E-mail : titem@bow.dts.mg MALI – AOPP B.P. 3066 – Bamako Phone : 00 223 228 67 81 E-mail : aopp@cefib.com MALI – JEMENI Immeuble Gadjaba Kadjel face place OMVS – Marché Dibida B.P.E. 2100 Phone : 00 223 223 4755 Fax : 00 223 223 9405 E-mail : jemeni@cefib.com MALI – Banque Malienne de Solidarité – BMS SA Immeuble Dette Publique 2ème Etage - BPE 1280 – Bamako Phone : (223) 223 50 34 - 223 50 44 Fax : (223) 223 50 43 E-mail : bms-sa@bms-sa.com MALI - NIAKO Quartier Légal Ségou KAYES Phone/Fax : 00 223 252 44 05 E mail : reseauniako_kayes@yahoo.fr NIGER – KOKARI B.P. 11122 - Niamey Phone /Fax : 00 227 75 25 12 E-mail : kokaris@intnet.ne UGANDA - CERUDEB Plot 7, Entebbe Road P.O. Box 1892 Kampala Phone : 00 256 41 251 276 Fax : 00 256 41 251 273 UGANDA - OMIPA B.P. 1240 KABINGO - MBARARA Phone : 00 256 48 52 26 11 E-mail : omipa_micro@yahoo.com RD CONGO - ADI –KIVU Actions pour le Développement intégré au Kivu B.P. 1554 Bukavu RD CONGO - CODEFI BP 78 Butembo RD CONGO – FAEF BP 561 Butembo E mail : baef3@yahoo.fr RD CONGO – LIDE/CCRD BP 94 Butembo – Nord Kivu Phone : 00 243 98 38 66 84 E-mail : lidelitembo@yahoo.fr RWANDA – Coopérative INTAMBWE B.P. 7018 KIGALI Phone : 00 250 510.536 Fax : 00 250 510.537 E-mail : intambwe2001@yahoo.fr SENEGAL – UGPM B.P. 43 - Meckhé Phone : 00 221 955 51 13 Fax : 00 221 955 52 86 E-mail : ugpm@sentoo.sn SENEGAL - ASPRODEB 8, boulevard de l'Est X rue 2 bis - Dakar Phone : 00 221 825 56 65 Fax : 00 221 824 48 74 E-mail : fkdiop@cyg.sn SENEGAL – FENAGIE PECHE Quai de pêche de Hanneton 20374 Dakar Thiaroye Phone : 00 221 832 11 00 E mail : fenagiepeche@sentoo.sn SENEGAL – SAPCA-EGAS (ex UGIE-EGAS) Quartier Diamagueune 1 B.P. 1120 M’Bour Phone :00 221 957 49 57/ 639 26 24 Fax : 00 221 957 40 07 E-mail : ugiegas@sentoo.sn
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TANZANIA - AKIBA Commercial Bank TDFL Building (Phase II) P.O. Box 669 Dar es Salaam Phone : 00 255 222 11 83 40 Fax : 00 255 222 11 41 73 E-mail : Akiba@cats-net.com TOGO – MICROFUND 64 rue du marché de N’kafu derrière la station Schell, Jean Paul II BP 61652 Lomé Phone : 00 228 226 63 20 Fax : 00 228 226 63 19 E - mail : microfund99@hotmail.com TOGO TIMPAC BP 173 Dapaong Phone: 00 228 770 83 70 E mail : timpac@ids.tg TOGO – WAGES B.P. 1339 Lomé Phone : 00 228 222 54 71 Fax : 00 228 222 78 99 E-mail : wages@cafe.tg

PALESTINIAN TERRITORIES ACAD P.O.Box 3816 Al-Bireh Via Israël Phone : 00 970 2 240 96 50 Fax : 00 970 2 240 96 52 E-mail : acad@palnet.com

CHILE – INDES Serrano n° 14 Dpto 202 Comuna de Santiago de Chile Phone/Fax : 00 562 63 26 00 E-mail : indes@terra.cl Website : www.indes.cl COLOMBIA - CONSOLIDAR Calle 55 N° 10-76 Oficina 305 Bogotá Phone : 00 571 248 99 01 E-mail : cconsolidar@etb.net.co COSTA RICA – PROFUND P.O.Box 769-1005 San José de Costa Rica Phone : 00 506 220 4122 / 290 2404 /296 8004 Fax : 00 506 290 2345 E-mail : asilva@intercentro.com ECUADOR – BANCO SOLIDARIO Av. Amazonas 3887 y Corea Edificio Grupo Enlace PBX : 260260 Quito Phone : 00 593 2 26 85 34 Fax : 00 593 2 26 88 43 E-mail : bsolidario@enlace.fin.ec Website : www.solidario.com.ec ECUADOR – FAPECAFES Av. Santiago de la Montanas 0660, 2do. Piso P.O. Box L-11-01-23 LOJA Phone : 00 593 7 25 83 478 Fax : 00 593 7 25 88 403 E-mail : info@fapefaces.org.ec Website : www.fapecafes.org.ec NICARAGUA – FENACOOP Phone/fax : 00 505 270 70 00 E mail : fenacoop@kurbonett.com PERU CAJA RURAL SAN MARTIN Jr Martinez de Compagnon # 235 Tarapoa, San Martin Phone : 00 51 94 52 60 11 Fax : 00 51 94 52 48 88 E mail : caja@crsanmartin.com.pe

PERU – EDAPROSPO Octavio Bernal 598 Jesús María Apartado Postal : 110325 Lima 11 Phone : 00 511 463 4173 / 00 511 461 6014 Fax : 00 511 463 0776 E-mail : david@edapr.org.pe PERU – LA-CIF Bolivar # 472 - bureau 702/703 Lima 18 Phone : 00 511 446 8877 Fax : 00 511 446 8585 E-mail : lacifluc@amauta.rcp.net.pe fernandol@cyrano-management.com PERU – LA FLORIDA Av. Peru N° 432-444 Pampa del Carmen La Merced – Chanchamayo Phone : 00 516 453 11 93 Fax : 00 516 453 11 90 E-mail : laflorida@infonegocio.net.pe PERU – Edpyme CONFIANZA Avenida Centenario N° 356 San Carlos 6 Apartado 125 Huancayo Phone : 00 5164 217 000 Fax : 00 5164 212 417 E-mail : presidenciaconfianza@terra.com.pe URUGUAY – SAINDESUR Bulevar Artigas 1119 - SUBSUELO - Montevideo Phone/Fax : 00 598 2 402 27 80 E-mail : indesur@adinet.com.uy

CARÏBBEAN
HAITI – COD/EMH Delmas 95 - # 15 Frères P.O.Box 6 - Port-au-Prince Phone : 00 509 257 75 44 Fax : 00 509 257 92 28 E-mail : idurandis@cod-emh.org HAITI – FONHSUD Rue Egalité - AQUIN E-mail : fonhsud@hotmail.com HAITI – KNFP/IMOFOR 173 bis Avenue Jean Paul II Turgeau Port-au-Prince Phone : 00 509 244 07 35 E-mail : knfphaiti@transnethaiti.com HAITI – INDEPCO Rue Pierre Anselme n°3 Entrée Automeca Route de l’aéroport Port-au-Prince Phone : 00 509 250 52 16/52 17 /52 18 E-mail : indepco@haitiworld.com

CAMBODIA - HATTHA KAKSEKAR # 39, Street 432 Sangkat Boeung Trabek Khan Chamkar Morn B.P. 2044 Phnom Penh 3 Phone : 00 855 23 994 304 fax : 00 855 23 994 303 E-mail : hatthakasksekar@online.com.kh Website : www.hkl.com.kh LAOS – FONDS COOPERATIF Rue T2 B, Sibounheuang Muang Chanthabury VIENTIANE Phone : 00 856 21 26 18 25 E-mail: fc.sisaliao@etllao.com VIETNAM - CEP Fund 14, Cach Mang Thang Tam Dist. 1 - Ho Chi Minh Ville Phone : 00 848 822 33 21 Fax : 00 848 824 56 20 E-mail : van.nth@cep.org.vn

MEDITERRANEAN BASIN
LEBANON ASSOCIATION NAJDEH P O. Box 113 6099 - Beirut Phone : 00 961 1 30 20 79 Fax : 00 961 1 70 33 58 E-mail : najdeh@cyberia.net.lb MOROCCO – ALAMANA 28 rue Oum Errabia – Agdal Rabat Phone : 00 212 37 77 01 41 Fax : 00 212 37 68 67 12 E-mail : fouad@alamana.org.ma Website : www.alamana.org MOROCCO – AMSSF 33 résidence Essalam Avenue Al Mohads – Appt. 1 Quartier de la Gare – Fès Phone : 00 212 55 626 764 Fax : 00 212 55 733 431 E-mail : amssf@menara.ma
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PHILIPPINES – Microfinance Alliance Fund Administrator Catholic relief Services – USCCB Philippine Program PO Box 1379, CPO Manila CBCP Building – 470 Gen. Luna St Intramuros 1002 Manila Phone : 00 63 2 527 8331 to 35 Fax : 00 63 2 527 41 40

EASTERN EUROPE
POLAND - TISE UL. Nalewki 8/27 00-158 Varsovie Phone : 00 48 22 636 07 40 Fax : 00 48 22 636 29 02 E-mail : inwestycje@tise.com.pl KOSOVO – KRK (Kreditimi Rural I Kosoves LLC) MEB Building 3rd Floor UCK Street Pristina - Kosovo Phone : 00 381 38 24 35 54

SOUTH AMERICA
BOLIVIA – BANCOSOL Casilla 13176 Calle Nicolás Acosta N° 289 Esq. Cañada Strongest/Plaza San Pedro La Paz Phone : 00 591 2 39 28 10 Fax : 00 591 2 39 19 41 E-mail : KKoenigsfest@bancosol.com.bo

ASIA
CAMBODIA - AMRET 72/74, rue 598 Boeng Kok II - Toul Kok BP 57 Phnom Penh Phone : 00 855 23 880 942 Fax : 00 855 23 881 342 E-mail : phalarin@amret.com.kh Website : www.amret.com.kh

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SUPERVISORY BOARD
LAMBLIN Xavier Chairman MESNY Philippe Vice - Chairman CAISSE DES DEPOTS ET CONSIGNATIONS represented by Hocine TANDJAOUI COMITE CATHOLIQUE CONTRE LA FAIM ET POUR LE DEVELOPPEMENT represented by Xavier LAMBLIN CONGREGATION DES SŒURS AUXILIATRICES represented by Sœur Geneviève GUENARD CONGREGATION DES URSULINES DE JESUS represented by Sœur Christiane GROSSIN CORDAID represented by Jacob Winter CREDIT COOPERATIF represented by Laurence MORET EPARGNE SOLIDARITE DEVELOPPEMENT represented by par Henry KLIPFEL BITSCH Gérard Member

BOARD OF DIRECTORS
Christian SCHMITZ Chairman of Board of Directors Christophe COURTIN Martine MORINCOME

EXTERNAL AUDITORS
Fouad EL M’GHAZLI SOFIDEEC BAKER TILLY

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I NTERNATIONAL S OLIDARITY F OR D EVELOPMENT AND I NVESTMENT
12, rue Guy-de-la-Brosse 75005 Paris Phone: 33(0) 1 40 46 70 00 Fax: 33(0) 1 46 34 81 18 Website: www.sidi.fr