How to turn finance and economy into tools able to satisfy the needs of everyone, including vulnerable populations? How to add ethics to savings products? How to create a company which would be able to combine social value-added with profitability? Those questions were asked from the start by the French NGO CCFD-Terre Solidaire when it created SIDI in 1983, and are still adressed today.

The goal was for the NGO to reinforce its support towards initiatives in the economic field, by using the same tools than traditional investment companies, and aiming to build a more balanced, inclusive, economy in developing countries. To provide SIDI with means in line with those objectives, CCFD-Terre Solidaire, together with Crédit Coopératif, created the first mutual fund in which savers share part of their interest payments with the NGO, allowing it to finance, on a long-term basis, SIDI’s support activities.

The early days

SIDI was at first conceived as a venture capital company, whose objective was to support the creation of SMEs with a strong local rooting, able to create jobs and induce new development perspectives: a carpentry in Morocco, a sawmill in New Caledonia, an industrial bakery in Cape Verde…From 1987 onwards, SIDI invested in Local Investment Companies, which would help decentralize the financing activities and would provide financial leverage. Thus INDES in Chile, SIPEM in Madagascar or SAINDESUR in Uruguay were born, companies that were able to finance and accompany local entrepreneurs.

The turning point of microfinance

Mid 90’s, facing the soar of the microfinance sector, SIDI decided to focus on a support of Microfinance Institutions (MFIs), allowing it to reach more people. SIDI provides those MFI’s with both financial support, and first and foremost tailored support for them to strenghten their skills and governance. In parallel, SIDI, wishing to promote alternative tools for very poor and isolated population to benefit from financial services, supported several pilot programs of community finance systems, including mutualist financial structure called MUSO in particular.

Rural areas as a priority

SIDI then quickly undestands the importance of strengthening rural MFIs. These institutions often struggle to develop, considering the challenge and the risks linked with savings and loans activities in rural areas, especially towards farmers. Nevertheless, their lasting presence is essential to the support of the local economic activities and to the insurance of a better, more stable income. Which is why, apart from its work towards MFIs, SIDI also also considered the question of agricultural value chains, and began helping producers’ organizations identify and enter better marketing channels (via fair trade, and/or organic certification), finance and assist processing projects, or provide seasonal loans.

In 2011, SIDI, together with two European social investors (AlterfinEtimos), launches FEFISOL, a fund for financing rural Africa.