SIDI’s 2023 annual report is online

Couv RA SIDI 2023 fr

2023 was a very special year for SIDI: we celebrated 40 years of existence.

  • 40 years of SIDI putting finance at the service of local economic development players in developing countries
  • SIDI has been financing and supporting local economic players for 40 years, working to improve the living conditions of vulnerable populations and promote virtuous ecological practices.
  • 40 years of an innovative intervention model based on the principle of a chain of financial solidarity, linking citizens who want to give meaning to their savings, to partner organizations and their beneficiaries.

Despite the combination of multi-factorial crises, SIDI manages to carry out its mission by placing additionality at the heart of its impact strategy, and by working on three major mission objectives:

  • Promoting economic equality
  • Promoting poverty reduction
  • Supporting the fight against climate change

Let’s continue to invest in a just transition.

Great news for the FEFISOL II fund

SIDI is very pleased to announce that USAID  – US Agency for International Development – and Prosper Africa – US government’s initiative to increase trade and investment with African countries – have approved a grant for FEFISOL II to help the fund mitigate currency risk on its local currency portfolio.

FEFISOL II is the investment fund backed by SIDI and Belgian investor Alterfin. Managed by Inpulse Investment Manager, FEFISOL II is dedicated to financing African rural microfinance institutions and agricultural entities sourcing from small producers in Africa.

FEFISOL II is a highly additional fund focused on sub-Saharan Africa, targeting the poorest and most unequal regions, often deemed too risky by traditional investors. It aims to support vulnerable populations, particularly women and rural inhabitants, by financing microfinance institutions to enhance financial inclusion, reduce poverty and generate employment. The fund also supports small agricultural entities to strengthen agricultural value chains and improve food security. FEFISOL II offers flexible debt products to meet diverse financial needs, and provides technical assistance to strengthen organizational capacities and support their social missions.

This grant provided by USAID and Prosper Africa will allow the fund to further develop its microfinance portfolio in Africa, and support FEFISOL II in its efforts to raise capital for the third and last closing, targeting to reach a size of €30 million. With this grant, USAID, Prosper Africa and FEFISOL II aim to enhance trade, investment and the business environment across the African continent by strengthening agricultural value chains, creating rural employment, increasing local value-added markets, reducing climate change vulnerability and, ultimately, contributing to the continent’s sustainable economic growth.

USAID and Prosper Africa’s contribution complements other blending mechanisms secured by the fund in 2023 with DFC – U.S. government’s development finance institution – and the Aceli Africa program. Given the amplification and overlapping of risks in Africa, it is crucial to rely on such risk-sharing mechanisms for a fund dedicated to financing rural microfinance and smallholder farmer organizations.

Testimonial at the SIDI General Meeting: resilience and social impact of Financiera FDL

présentation Julio Flores AG SIDI

This year’s General Meeting was an opportunity for SIDI to invite one of its partners to testify. Julio Flores, Managing Director of Financiera FDL, came to present the activities of this microfinance institution (MFI) which operates in Nicaragua, the 2nd poorest country in Central America.

The fruitful exchanges between Julio Flores and SIDI shareholders continued the following morning with a question and answer session. This time allowed us to go into more detail about FFDL’s business and its formidable resilience in the face of crises.

The NGO Fondo de Desarrollo Local (FDL) was created in 1993 by the Jesuits, following the civil war. FDL’s aim is to improve the living conditions of the most vulnerable Nicaraguans by providing them with loans, training and support services to help them develop their businesses, at a time when banks are not interested in this group. Financiera FDL has become the first MFI in the country and one of the largest in Central America. The institution mainly targets low-income people, farmers, breeders and micro-entrepreneurs in peri-urban areas. Thanks to its 38 branches, La Financiera has a strong territorial coverage, enabling it to provide 70% of its loans in rural areas, to populations with little access to credit.


Financiera FDL and its resilience to crises.

FDL’s growth was first slowed by the crisis between 2008 and 2011. In addition to the global economic crisis, an anti-MFI “Movimiento del no pago” (non-payment movement) has developed. It has led to a decline in the number of customers and payment defaults in the microfinance sector. FDL, despite a decline in portfolio and customers of around 50%, managed to restructure, before creating, alongside the NGO, the financial company Financiera FDL (FFDL) in 2016. To structure this financial company, FDL has chosen “international partners who share its vision”. As a result, SIDI became a minority shareholder.

A second crisis affected the country from 2018 to 2021. Politico-social conflict (murderous repression by the authoritarian regime) and economic instability led to a three-year contraction in GDP. Mass migration (10% of the population fled the country) was caused by persecution of civil society, including the Church. The number of FFDL customers has plummeted. This recession and drop in activity were exacerbated by the Covid crisis. Several MFIs have gone bankrupt, while FFDL’s portfolio has once again shrunk by 50% (more than $6 million in losses in 2018 and 2019)

FFDL overcame a number of challenges in order to emerge from the crisis: renewing its customer base, consolidating its portfolio and building up reserves. To support it, SIDI participated in the recapitalization of FFDL and made a 5-year subordinated loan (total outstanding amount of over €1.7 million in 2023). This second acquisition brings SIDI’s stake in FFDL to 4.4%. Backed by the support of its international shareholders, FFDL was able to negotiate with lenders to maintain its credit lines.

FFDL has achieved a spectacular turnaround. The portfolio has been growing since the end of the crisis, with a forecast +12% in 2024, which will enable us to recover the $6 million in losses recorded in recent years. All this has been made possible by the serious management and expertise of the company’s management team.


FFDL, an MFI with a strong social and environmental impact.

Nicaragua is one of the countries most exposed to climate change. The economy is partly based on cattle farming (54% of agricultural land), and the deforestation rate is the second highest in Central America. These activities are highly polluting and destructive, while severe droughts reduce agricultural yields by 20 to 40%.

Over the years, the MFI has developed a comprehensive range of support services for producers and breeders in the transition to agro-ecology. Support for producers in agro-ecological practices focuses on themes such as water management or arboriculture combined with animal husbandry. This technical assistance is paid for in part or in full by FFDL, depending on the customer’s standard of living.

To improve producers’ incomes and reduce poverty, FFDL supports product processing, such as packaging coffee for export. This on-site processing of raw materials by producers creates added value, reduces the number of intermediaries and enables them to sell their produce at a higher price, guaranteeing local producers a better income.

FFDL seeks to maximize its impact, and the results are there. According to an independent survey partly financed by SIDI, in 2023, more than 60% of FFDL’s customers will report an improvement in their standard of living. The structure adapts its loan amounts and terms according to customers’ needs. It grants loans from 14 months on average (for traders and businesses) to 36 months for agricultural activities. This earned FFDL a Microfinance Index award in 2023. (see related article).

FFDL has demonstrated impressive resilience, while maintaining a strong social and environmental dimension, with a focus on financial inclusion in rural areas and environmental protection.

For Julio Flores, “although SIDI is a minority shareholder, it is very much involved in FFDL’s key moments. SIDI’s active participation in FFDL’s governance through the involvement of a volunteer consultant (on its Board of Directors) is decisive”.

The Microfinance Index 2023 honours two of SIDI’s partners!

Fondo de Desarrollo Local (FDL)

For many years now, SIDI has been committed to the continuous improvement of its social and environmental performance (SEP) and that of its partners. To this end, we monitor a number of economic, social and environmental indicators each year, which we analyze and publish in our social report and our social responsibility report. However, we know that measuring impact itself is a far more complex challenge, but one that is nonetheless necessary if we are to track our progress towards our social objectives. That’s why SIDI has been testing a number of innovative models in recent years to advance our understanding of this crucial issue.

SIDI participated in the microfinance index of 60 Decibels, a company specializing in impact measurement based on listening to beneficiaries, thanks to funding from the Fondation Actes. It was a way of thinking about a new way of apprehending the results of its partners in the field, through analysis of the perception of change felt by the final beneficiaries.

The index is based on direct feedback from customers of over 100 microfinance institutions worldwide. The 60 Decibels team has developed a questionnaire to survey the beneficiaries of these institutions on their perception of the impact on their lives of the financial services to which they have access. This enables each participating institution to understand not only its strengths in the eyes of its customers, but also where there is still room for improvement, and to benchmark itself against its peers.

The participation of SIDI’s partners Kafo Jiginew and Fondo de Desarrollo Local in this initiative is already proof of their commitment to their clients and their desire to improve their practices in order to maximize their impact.

Kafo Jiginew is a mutual savings and credit institution based in Mali, in existence since 1987. Its mission is to give low-income Malians access to local financial services. Kafo Jiginew has formed a partnership with SIDI since 2017, and in recent years has demonstrated a willingness to evaluate the effects of its activity on its beneficiary populations. The microfinance index was an ideal way to start tackling this issue, due to the ease of the process and the limited cost compared to other impact study models. The results are very positive: Kafo ranks4th among Sub-Saharan African institutions, and scores impressively on almost every dimension of the report.

Kafo Jiginew customers seem to be particularly satisfied with the development of their business and thus their income since the first loan granted by the institution.

To the question “Has the revenue you earn from your business changed thanks to Kafo Jiginew’s services?”, 63% of respondents claim to have seen a significant increase in their revenue, compared to an average of 22% in the benchmark of all institutions participating in the index.

For 54% of customers, the fact of having been able to consolidate or grow their business or activity is what has most influenced their quality of life, through the generation of more profits enabling them to meet the needs of their family. The financing provided by Kafo also enables customers to generate local employment. Thus 36% of respondents claim to have hired at least one extra person.

Fondo de Desarrollo Local (FDL) is a leader in Nicaragua’s microfinance sector. Since its creation, first as an NGO in the 90s, then as a regulated financial company from 2016, FDL has been committed to improving the living conditions of the most vulnerable, by providing loans, training and support services.

In partnership with SIDI since 2015, FDL had already carried out an initial study with 60 Decibels in 2021, which focused on understanding how its customers had been affected by the Covid crisis, with the aim of setting up services to help them bounce back from this difficult context. This second study, launched in 2023 as part of the Microfinance Index, is part of FDL’s wider drive to collect recurring feedback from its customers, in order to improve over the life of their new strategic plan.

FDL’s results are also very encouraging, with the institution ranking 5th in the Index’s Latin American MFI rankings.

Almost all FDL customers say they have seen an overall improvement in their living conditions, and 60% of them consider this improvement to be particularly significant. FDL is well above the benchmark for this question, at 23%.

For approximately half of the respondents, this improvement is mainly due to the fact that the loan enabled them to buy or build their home, or carry out the necessary renovations. For 29% of them, the financing was used to grow their business. Finally, 9% of respondents say their quality of life has improved thanks to their ability to cope with everyday problems and improve their living comfort as a result of the financing. To the question “How has your quality of life improved thanks to FDL financing?”, one customer replied: “When I needed it, they gave me a loan to renovate the house and the store. Now I have a fireplace and can cook without smoke. It’s improved my health and I don’t bother the neighbors. I built a wall, my house is safe, and the store is more attractive.”

Although the study model proposed by 60 Decibels is more a perception study than an impact study in the strict sense of the term, it does give a voice to beneficiaries, and enables us to begin assessing the effects of an institution, in a way that is simple and relatively inexpensive for institutions. This test of the research model proposed by 60 Decibels was therefore conclusive for the partners, whether for Kafo, a partner rather new to monitoring their social performance and impact, but with very positive practices and highly satisfied customers, or for FDL, a more experienced organization seeking to measure its impact over the long term.

SIDI was also pleased with its partnership with 60 Decibels, and will be renewing this cooperation by taking part in the Coffee Index, a new initiative aimed this time at coffee cooperatives and SMEs in East Africa, and designed to assess the perception of their producer-suppliers regarding the services offered to them.

Discover SIDI’s Social and Environmental Report 2022

We are pleased to share with you SIDI’s new social and environmental report, which presents the partners’ results in 2022!

This report is organized around SIDI’s mission objectives, defined this year as part of the new strategic plan.

  • Through its financing and support activities, SIDI aims to reduce economic inequalities in developing countries through the emergence and empowerment of local economic players.
  • It seeks to combat poverty through an approach focused on the most vulnerable, in particular people living in rural areas, women and young people, who are the lifeblood of these countries and the promise of a more equitable, fairer and more united world.
  • Finally, SIDI is firmly committed to building a more sustainable world that respects the environment and is capable of adapting to climate change.

The team is proud to present the results of its partners from the point of view of its mission objectives, results which are the fruit of in-depth analysis made possible by the high-performance PSE evaluation system developed by SIDI in recent years. This system makes it possible to analyze the contribution of partners to SIDI’s objectives, highlighting their progress as well as areas where there is still room for improvement.

This report is an opportunity to find out more about SIDI’s partner organizations, and to delve into an analysis of their evolution in terms of economic, social and environmental performance.

  • Discover the results of two impact studies financed by SIDI in 2022
  • Find out more about gender mainstreaming at SIDI and its partners
  • Find out more about SIDI’s commitment to environmental protection, through its promotion of agroecology and sustainable practices among its partners, as well as through the development of a new “climate” portfolio, a key focus of the new strategic plan.

SIDI acquires a majority stake in Inpulse, a management company specializing in impact investment

SIDI is delighted to announce that it has taken a majority stake in the Belgian management company Inpulse Investment Manager, in which it previously held a 35% stake, through the partial buyout of Crédit Coopératif’s shares.

SIDI and Crédit Coopératif, the two shareholders in Inpulse, have decided to invert their respective shares in the company’s capital in order to consolidate it and support it in the development of its impact fund management activities in Europe and the South.

SIDI, more than Crédit Coopératif, has the experience of impact investment, both geographically and thematically (particularly in the financing of agricultural entities), to support development as a majority shareholder in the management company. By remaining a minority shareholder and member of the Board of Directors, Crédit Coopératif is demonstrating its determination to continue supporting the development of Inpulse alongside SIDI, of which it is also a shareholder and long-standing partner, and with which it has developed numerous collaborations in Africa and the Mediterranean Basin, notably within the framework of the FEFISOL and COOPMED Funds.

For SIDI, the strategy linked to this operation is based on 3 axes:

  • Consolidate the funds managed by Inpulse and ensure their economic viability, in particular the FEFISOL II fund, supported by SIDI.
  • Develop synergies between SIDI and Inpulse, notably through geographical complementarity at the operational level, the sharing of experience and best practices on the subjects of impact, social and environmental performance, compliance and the development of institutional relations.
  • Support the development of Inpulse in its efforts to diversify its activities, thanks to a competent team committed to the microfinance and social entrepreneurship sectors, in line with SIDI’s vision and strategy.

SIDI is taking a majority stake in a pioneering management company in the impact sector, with AIFM approval, which will also enable it to continue innovating socially in partnership with other investors and operators in the sector.

Discover FEFISOL’s Social & Environmental Report 2022

The social & environmental report on the first year of activity of the FEFISOL II fund has just been published!

FEFISOL II is an investment fund dedicated to financing rural microfinance and small-scale family farming in Africa. This is the successor fund to FEFISOL I, launched on the initiative of SIDI and Alterfin for 12 years.

The team is very proud to present achievements that are fully in line with the fund’s ambitious social and environmental objectives:

  • The fund has already financed 18 partners (12 agricultural entities, 6 microfinance institutions) in 11 sub-Saharan African countries.
  • 83% of the farms financed are certified fair trade and/or organic.
  • 69% of the portfolio is invested in countries with a low HDI (Human Development Index)
  • 85% of the microfinance portfolio is dedicated to Tier 2 and Tier 3 institutions: small and medium-sized institutions with assets of less than $50 million and less than $5 million respectively.
  • 1.2 million final beneficiaries, 51% of whom are women
  • The fund is aligned with the 2X Challenge, the multilateral initiative whose aim is to deploy unprecedented volumes of capital in support of projects that empower women.

The first closing of FEFISOL II took place in May 2022 for 22.5 million euros with the founders (SIDI, Alterfin), European development agencies (BIO, EIB, Proparco) and European private players (Banque Alternative Suisse, Banca Etica Populare, Crédit Coopératif, SOS Faim Luxembourg). This closing is accompanied by a technical assistance package of 1.3 million euros from Proparco and Bio.

On the strength of these results, the FEFISOL II fund aims to close a second closing with new investors by the end of the year.

Publication of SIDI’s 2022 Social and Environmental Report

The Social and Environmental Report brings together the figures and data from SIDI’s social investment activities, as well as the results in terms of the social and environmental performance of the partners we support.

The Social and Environmental Report is the result of extensive data collection and analysis work carried out by SIDI’s Social and Environmental Performance team. It will be supplemented by a detailed report on the partners’ social, environmental and financial performance, available in September 2023.

In 2022, SIDI is pursuing its mission as a solidarity investor and demonstrating the added value of its action.

It supports 120 partners in 35 countries, mainly rural or mixed microfinance institutions and agricultural entities, most of which are certified organic and fair trade.

SIDI continues to target the most vulnerable:

  • 78% of partners are located in high-risk countries;
  • 68% of partners are located in countries with a low or medium HDI ;
  • 52% of the portfolio is dedicated to sub-Saharan Africa;
  • 66% of partners target rural areas.

It maintains as a priority the empowerment of partners in the process of consolidation:

  • 70% of MFIs supported are small (Tier 2/3)
  • Loans granted are on average 3 times lower than those granted by other investors in the sector.

SIDI’s partners adopt responsible and sustainable practices:

  • 73% of farming units are certified organic and/or fair trade;
  • 78% of MFIs have set up a system for collecting and analyzing beneficiary complaints.

The Muungano agricultural cooperative wins the Grands Prix de la Finance Solidaire!

“We’re very inspired by this award,” confides Daniel Habamungu, the cooperative’s CEO. It further strengthens our determination to work together. It’s very important for the collective, because it gives courage and loyalty to the members of the cooperative”.

The award is in recognition of the remarkable work carried out by the Muungano team. In recent years, the cooperative has tripled its membership to 4,100 small family producers, 43% of whom are women. It produces very high value-added coffee in a particularly difficult context: limited infrastructure, transport difficulties, chronic insecurity in the region, and the area’s vulnerability to climate change.

The plantations are located between 1400 and 2600m altitude, and these volcanic highlands offer optimal conditions for growing Arabica coffee. The cooperative is certified fair trade and organic. Coffee growers take advantage of the great plant diversity to use agroforestry methods that combine shade and fruit trees with coffee plants. This naturally fertilizes the soil, reduces the risk of landslides and diversifies members’ sources of income.

SIDI has been a partner of Muungano since 2015. In a sector where other financiers charge high rates and also require property guarantees, SIDI can offer loans at attractive rates, enabling the cooperative to pre-finance coffee campaigns. At the same time, SIDI offers tailor-made support in key areas such as accounting and financial management, performance management and development strategy. Lastly, it supports the promotion of sustainable farming practices, particularly agro-ecology.

Despite the major challenges facing the cooperative, it has been able to resist, progress and supply the gourmet coffee sought after by connoisseur buyers in a niche sector with very high added value. SIDI is very proud to support the dynamism and resilience of the people of Kivu and the members of Muungano.

Well done to the great team at the Muungano agricultural cooperative and to all the coffee growers!