Archives des Impact

How to remove barriers to financing agrifood organizations in developing countries

By Johan Thuard, West Africa Investment officer

In developing countries, financing agricultural activities represents a major challenge, one that is often underestimated. According to ISF Advisors, only 34% of the $160 billion needed each year to support the 220,000 small and medium-sized agricultural enterprises in Southeast Asia and sub-Saharan Africa is covered by formal financing[1]. This lack of financing creates an annual deficit of $106 billion, with serious consequences for the sector’s dynamism. In particular, its ability to meet the challenges of food security, job creation and reduced vulnerability for the 1.3 billion people who depend on agriculture in these regions [2]. This deficit is colossal; to better understand its scale, it is almost equivalent to the $113 billion allocated to fossil fuels by the main banks of the European Union in 2023 [3]. This critical situation cannot be resolved by the market alone.

But what explains such a deficit? At SIDI, through our experience as a solidarity investor active for over 40 years, we seek to shed light on this question. In this context, SIDI finances cooperatives and agri-food SMEs in developing countries. These organizations work with small-scale producers in support of family farming, both upstream – by facilitating their production and their transition to sustainable agriculture – and downstream – by developing outlets through the processing and marketing of agricultural produce. We identify three major barriers to the mobilization of financing by agricultural organizations: problems of identification, preparation, and an imbalance between the risk and profitability of transactions. These barriers particularly affect smaller, less mature organizations. These organizations find themselves in the “missing middle”, while also being ill-suited to the requirements of formal financiers (commercial banks, international financiers, donors, etc.). This article looks at these three barriers, focusing specifically on debt financing, and proposes solutions to overcome them.

Better identification between agri-food organizations and funders

For agri-food organizations, particularly those with little experience of fund-raising, it can be difficult to determine which funders to approach, given the fragmented nature of the ecosystem. Each funder has its own strategic priorities, investment criteria and areas of operation, which can be highly specific and difficult to understand externally. Similarly, for international players, identifying new opportunities not yet financed by other players can be a complex task, especially for organizations that are not members of entrepreneurial networks or that operate in remote areas. Finding new financing opportunities requires in-depth knowledge of the local economic fabric. This represents a challenge for investment officers, as the areas to be covered are vast. To illustrate, at SIDI each investment officer is responsible for three to four countries, so deepening our knowledge of local players is a gradual, long-term process. To enrich our understanding of the field, we regularly collaborate with allied organizations, whether local or not. For example, SIDI invests in local I&P funds, such as SINERGI in Burkina Faso, which focus mainly on agricultural sectors. We have also established a partnership with the Ethiquable cooperative to finance and support some of their supplier cooperatives, and maintain close links with organizations specializing in agricultural value chains, such as Nitidæ. At the same time, we are strengthening our local presence with the opening of two offices in Lomé and Kampala, from which we conduct much of our business in sub-Saharan Africa.

The challenge of preparing to raise funds

Fund-raising is a complex process, requiring specific resources and skills. Sometimes, there is a gap between the prerequisites that funders may have to validate a transaction and the capacity of local organizations to meet them. This gap becomes particularly problematic when it involves the fundamentals – operations, social and environmental impact (particularly for impact funders), finance, team, market, or data reliability. Developing cooperatives and SMEs are often not equipped to meet these expectations. This is particularly true for organizations that are growing organically and lack a strong management team. We also note that these organizations may find it difficult to identify their own areas for improvement, nor are they able to overcome them on their own. To overcome these shortcomings, it is important for organizations to have access to specific support to prepare for financing. This is where SIDI’s offer, which combines financing and support, comes into its own. Based on a diagnosis by an investment officer, SIDI can offer not only financing, but also support tailored to the organization’s needs. SIDI works with a number of facilities, including the ACTES Foundation, the SSNUP program and the AT facility of the FEFISOL II fund, to meet the support needs of prospective and existing partner organizations. There are also investment readiness programs that will reinforce the fundamentals while supporting organizations in the preparation of their funding applications – market analysis, creation of business plans or other documents intended for investors. Some of these programs also include prospecting and matchmaking. There are many such programs, often financed by donors and implemented by consulting firms. Examples include Activ’Invest in Senegal, Invest Salone in Sierra Leone, and CrossBoundary, which helps agri-food companies raise funds in several sub-Saharan African countries.

The imbalance between risk and profitability in agricultural financing

A study carried out by Dalberg on 3,500 loans granted to agri-food SMEs by international financiers reveals that half of all loans between €250,000 and €500,000 are not profitable. One of the main reasons for this imbalance is the high and rising cost of risk. In particular, agricultural production is under increasing pressure due to its growing exposure to climatic disturbances. Furthermore, agri-food organizations often operate in markets where product supply and demand are not systematically correlated. As a result, some sectors experience cyclical crises, putting operators under pressure and increasing the risk of default. This risk causes the market to tense up, and it concentrates on certain well-defined segments:

Organizations with a lower risk profile, generally larger, more mature organizations with a solid financing history and/or able to offer guarantees.
Short-term financing, often in the form of working capital, instead of medium-term loans to finance equipment or investments
High financing rates to cover transaction costs

As a result, the market remains relatively static, with a limited number of organizations already known to the sector and financed, and little openness to new partnerships. For a financier like SIDI, whose mission is to be additional, notably by acting as the leading international investor for certain partners, managing this risk is an essential challenge. This is achieved through several approaches: on the one hand, portfolio diversification across different sectors (such as microfinance and agriculture) as well as more or less mature organizations; on the other hand, SIDI’s business model enables it to take greater risks, thanks to its philanthropic shareholding and access to certain guarantee tools. These elements are essential if we are to ” intervene where others do not go “, and thus support high-risk organizations, sectors and regions. This also gives us the possibility of financing particularly risky organizations and/or not being profitable on certain transactions when this is justified by strong additionality and a significant social or environmental impact. From this experience, it is clear that we need to have access to guarantee mechanisms or subsidies so that financiers can be more additional, have a greater impact and thus make the sector more dynamic. Effective solutions already exist, starting with the Aceli program operating in East Africa. This program, dedicated to financing the agricultural sector, offers financiers subsidies to reduce transaction costs, and guarantees to reduce the cost of risk. The value of this program also lies in its ability to minimize market distortions, while encouraging financiers to support the least well-served companies: grants cover only part of the costs, and are higher for companies that have never raised institutional funds, or that have a higher social or environmental impact. This is the kind of example that deserves to be better studied and replicated in other regions, given its proven effectiveness. In a context where the vulnerability of producers and the challenges of food security are increasingly pressing, it is crucial to work towards reducing the barriers to financing agri-food organizations in developing countries. In addition to offering some food for thought, this article is an invitation to all those who wish to collaborate and develop concrete solutions for a more dynamic, socially just and ecologically sustainable sector.

Johan Thuard, West Africa Investment officer

[1] ISF Advisors, The state of the agri-SME sector – Bridging the finance gap, 2022 [2] ISF Advisors estimates that this concerns 260 million households – ~1.3 billion people – considering family farming as an integral part of their livelihood in South-East Asia and Sub-Saharan Africa [3] Banking on Climate Finance Chaos, Fossil Fuel Finance Report, 2024

FEFISOL II’s new 2023 social and environmental report

Launched in 2022 by SIDI and Alterfin, and managed by Inpulse Investment Manager, the FEFISOL II fund has financed 40 partners in 16 African countries to the tune of 33 million euros since its inception. The SIDI,Alterfin andInpulse teams are proud to present the results of FEFISOL II’s second year of activity, which are once again in line with the fund’s strong social and environmental mission:

100% focus on Africa and fragile countries, with a strong presence in rural areas
More than 2 million final beneficiaries, 61% of whom are women
Support tailored to the needs of partners in the field, with projects focused on social and environmental performance
Partner organizations committed to the financial inclusion of the poorest, the creation of local added value and the promotion of sustainable agriculture.

Immerse yourself in the details of the fund’s activity in 2023, as well as its partners’ results, and discover inspiring testimonials from the field in this new social and environmental report.

VOIR LE RAPPORT

Gain a better understanding of how Abakundakawa, a Rwandan coffee cooperative, is helping to change the lives of its members.

Productrice de café de la coopérative abakundakawa

The Farmer Thriving Index, a new initiative designed to better assess changes in the lives of small-scale farmers.

The Farmer Thriving Index (FTI) was created by 60Decibels, a company specializing in social impact measurement. The FTI is an assessment designed to better understand the changes brought about by cooperatives for their members, as perceived by small-scale agricultural producers themselves. It takes into account several dimensions of economic, social and environmental well-being, providing an overall assessment of their quality of life and the sustainability of their activities. In East Africa, the FTI has focused specifically on small-scale coffee growers. A control group of 1,026 small-scale producers not affiliated to any cooperative or agricultural enterprise was interviewed. Their situations and responses are then compared with those of cooperative coffee growers. SIDI contributed to this study by co-financing, with our partner Aceli Africa and the ACTES foundation, an assessment of the situation of small-scale coffee producers who are members of Abakundakawa, a cooperative located in the north of Rwanda in the poor regions of Rushashi and Minazi. In all, 282 Abakundakawa suppliers were interviewed to better understand their situation and the effects of cooperative membership on their lives.

Abakundakawa, a Rwandan cooperative supported for over ten years by SIDI

Abakundakawa is a producer organization created in 1999 on the initiative of 367 Rwandan coffee growers, with the aim of enhancing the value of their production. From the outset, the organization has been dedicated to purchasing and processing Arabica coffee cherries into high-quality green coffee for international marketing. Over the past 25 years, Abakundakawa has gone from strength to strength, and today boasts over 2,100 active members, 44% of whom are women, 23 permanent employees and 175 seasonal workers. It exports around 19 containers of coffee every year. Abakundakawa’s activities have a strong social mission. Indeed, improving the standard of living of its members is at the heart of the cooperative’s activity. To meet this objective, it charges purchase prices higher than the minimum price set by the government. The organization has been Fair Trade certified since 2005, and has thus been able to increase its impact on social and local development through projects to supply water, improve agricultural access, pay for mutual health insurance schemes, etc.

The study describes producers whose living conditions are particularly fragile

Two-thirds of the producers who responded to the survey are men, owners of their own land, with an average age of 48. The families are large and poorly educated; for 37%, elementary school is the highest level of education in the family. On average, they own 2.7 hectares of land, 44% of which is devoted to growing Arabica for export, the rest to peas, corn and bananas.For half of those interviewed, coffee production is their main source of income. An assessment of their behavior shows that 60% of respondents have incomes below the “Living Income Reference Value”, an estimate of the minimum amount needed to live decently in the region. However, almost all the farmers interviewed want to continue producing coffee, and hope that their children will too.

What Abakundakawa brings to its producers

The cooperative strives to build member loyalty through regular training by agronomists and field agents: 71% are in regular contact with these agents, whom they meet three times a year on average. What’s more, the interviewees’ farming practices are generally more virtuous than those of the control group, with all of them implementing good farming practices and two-thirds practicing agroforestry. Abakundakawa facilitates access to suitable tools (hoe, saw, pruning shears) and cows to promote natural fertilization of plots. It also carries out specific actions in favor of young people and women, and offers a savings service. Thanks to the latter, 53% of respondents say they save every month, compared with only 25% of producers in the control group. These actions are the main drivers behind the very high level of supplier satisfaction with the cooperative, which scores highly on the Net Promoter Score, an indicator that compares the number of promoters of an organization (i.e. the number of people who would recommend the organization to their friends and family) with the number of detractors (people who would not recommend the organization to their friends and family). Abakundakawa achieves a very high score (NPS of 51), a testament to the strong satisfaction and loyalty of its members. These testify in particular: “They teach us how to make coffee, compost, mulch, prune, weed and renovate the field. All these things that the cooperative teaches us are very important for a coffee grower, because they enable him to improve his growing methods in a professional way. I think this is something unique that our cooperative possesses and can benefit all coffee growers.” Woman, aged 61

“I like the way they value their members and offer training so we can improve the quantity and quality of our produce. They also offer premiums and provide cows for breeding so we can get manure easily.” Woman, 62 As in the majority of satisfaction surveys linked to the provision of services, the only subject of dissatisfaction remains the price paid, in this case for coffee. 62% of respondents were dissatisfied with the prices paid by Abakundakawa. However, 62% also claim to have made a profit on the last harvest, and half of them have noticed an improvement on last year in terms of income received. In fact, Abakundakawa pays a higher price than the market price, and the premiums from organic and fair trade certification also enable the payment of a bonus at the end of the campaign. Aware of the crucial contribution made by the cooperative, 80% of those questioned plan to continue investing and developing their coffee production. It’s a safe bet that they will continue to supply Abakundakawa with top-quality fair-trade coffee for a long time to come.

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

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!

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 ranks^4th 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.

Voir le rapport

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.