Palestine: the challenge of supporting economic activities in wartime

SIDI has been supporting partners in the Israeli-occupied Palestinian territories since 1988! But SIDI quickly realized that any investment in Palestinian micro-businesses - extremely risky in the absence of a just peace in the region - would only be viable if a guarantee mechanism was put in place to secure these loans and cover the microfinance institutions against losses linked to the occupation.

Understanding the financial tools deployed by SIDI

SIDI has several financing tools at its disposal to support the activities of its partners. For SIDI, “equity investments” consist in acquiring a stake in the capital of partner companies, in order to strengthen their equity capital and support them in their long-term development.

Loans” enable our partners, in particular producer organizations, to pre-finance their members’ harvests.

So what is Daman? Through this article, we wish to highlight this Palestinian guarantee fund, an unusual and innovative means of financial resistance, which, on its own scale, attempts to support the most vulnerable civilian populations.

A little history…

It took almost 10 years to create Daman in 2015, a Palestinian company whose shareholders were initially SIDI, ACAD Finance and ASALA (the latter two being SIDI’s partner Palestinian microfinance institutions). In 2019, the Daman guarantee fund is being replenished thanks to initial co-financing from the Luxembourg government and the NGO CPJPO[1], enabling it to scale up.

One of the main strengths of the Daman guarantee fund is that it has identified “political” risk, i.e. the deleterious effects of the violent occupation of Palestine by the Israeli army, as the main risk to be covered for Palestinian micro-enterprises.

Of course, the initiators of Daman, both at SIDI and ACAD Finance, never imagined that after the bloody and murderous Hamas attack in 2023[2], the terror imposed by Israel, which amounts to war crimes, crimes against humanity and even genocidal risk, would “wipe out” part of the population[3] and the entire infrastructure[4] of the Gaza Strip.

The guarantee fund patiently built up thanks to subsidies from Luxembourg has proved insufficient to meet needs in Gaza, but also in the West Bank, where joint pressure from settlers, the police and the army is leading to violent events and the physical isolation of Palestinian communities and towns. This is a challenge for Daman and especially for its future financing, but it does not prevent it from operating and “doing its bit” in a sometimes dramatic context.

[1] Committee for a Just Peace in the Middle East – https://paixjuste.lu/

[2] Over 1,200 dead, mostly Israeli civilians

[3] 72,000 dead and 180,000 wounded, mostly women and children

[4] 92% of buildings destroyed

How does the Daman guarantee fund work?

Each year, depending on the amounts available, Daman allocates a sum to each of the three Palestinian microfinance institutions: ACAD, ASALA and REEF. These three microfinance institutions inform Daman of the outstanding loans which will benefit from this coverage and which meet the repayment criteria. No money is transferred. This is the maximum global sum that the microfinance institution can claim from the guarantee fund, if it ever demonstrates that its client has been unable to pay its loan because of the Israeli occupation.

Conditions for repayment and cancellation of Daman guarantee fund debts

The Daman guarantee fund doesn’t repay just anything and everything. Insured” loans must be under US$10,000, for a maximum of 48 months, for income-generating activities. Consumer loans are excluded. Daman reimburses only the principal, i.e. unpaid interest is assumed by the microfinance institution. If the customer has been in default for more than a year, then the microfinance institution can turn to the Daman guarantee fund to request repayment. And if the customer was already in default (late payments) before the “accident of life” linked to the military occupation, the loan is not eligible for repayment.

For their part, microfinance institutions contribute 1.5% of the guaranteed portfolio to Daman’s costs.

In the field, concrete examples to illustrate the situation

Mohamed H applied for a loan of US$4,000 for his cage-making workshop, which enables him to raise poultry. During the attack on the Tulkarem refugee camp in early 2025, Israeli bulldozers razed his workshop to the ground. Mohamed H lost everything.

There’s also the story of Assel A, who had taken out a loan to invest in her market gardening activities by installing a greenhouse. The village where she lives was “closed” by settlers for a few days. She was unable to access it and irrigate the fields. The entire harvest was lost, and the tarpaulins were lacerated by the settlers.

These two customers are unable to pay their loans, and provide a concrete illustration of the colossal difficulties encountered by Palestinians in maintaining an income-generating activity in the context of war.

The microfinance institution that granted the loan can then submit a claim for reimbursement to the Daman guarantee fund by preparing a file. If the claim is admissible, Daman appoints an “expert” to verify the veracity of the facts. If the report is favorable, Daman can then disburse the funds to the microfinance institution and cancel the customer’s debt. Around 85% of applications submitted by microfinance institutions to the Daman guarantee fund are accepted.

This makes it easier for Palestinian microfinance institutions to rely on this mechanism, which covers part of the financial risks incurred. By reassuring Palestinian microfinance institutions, it is ultimately vulnerable populations who benefit more easily from loans to invest in income-generating activities, despite the war.

In 2024 (annus horribilis given the total losses recorded in Gaza), Daman was able to compensate $332,623 from 386 customers of the three microfinance institutions[1]. To conclude, let’s give the floor to the evaluator commissioned by :

The evaluation of the project shows that, despite all the constraints linked to the context, Daman remained operational and played a stabilizing role by enabling MFIs to benefit from its risk coverage. This enabled them to lend to very vulnerable customers, which would probably not have been possible without Daman.[2].

The big challenge remains: how can Daman be sustainably capitalized to meet the very specific needs of a zone of war and occupation such as Palestine? This is what Daman and its shareholders need to do!

[1] US$634,000 since the start of the Daman operation

[2] Project evaluation of Daman for SME’s by MFR

 

Kitagata: a Ugandan cooperative promoting resilient agriculture

Who’s Kitagata ?

In southwestern Uganda, the Kitagata Mixed Farmers cooperative plays a key role in improving food security and incomes for smallholder farmers. Created in 2013 on the initiative of the farmers themselves, it meets a fundamental need: to have a common space to share the challenges encountered in the field, build collective solutions, and have greater influence with local economic actors. SIDI supports this partner through its locally based branch in Kampala, Soluti. Kitagata mainly sells millet and beans to Ugandans.

A diversified offering for members

Initially active in the Sheema district, Kitagata has gradually expanded into the neighboring districts of Bushenyi, Mitoma and Rubirizi, with a simple rationale: to pool efforts, increase production volumes collected, and better defend the interests of its members. Its vision is clear: to promote local food production and fight hunger, in a context increasingly constrained by climate change.

In addition to market access, the cooperative has developed a diversified range of services to best meet the needs of its members: literacy sessions, training in financial management, and assistance in structuring small village savings groups and
credit. In 2024, Kitagata also began granting cash advances to producers, enabling them to meet the needs of the agricultural season.

Kitagata is strongly committed to promoting gender equality. Women account for 66% of the cooperative’s beneficiaries, and specific programs are set up to meet their needs as effectively as possible: this is particularly true of certain groups of widows, who are a very vulnerable group in Uganda, and to whom the cooperative provides additional services.

Facing up to climate challenges

In recent years, the farmers supported by Kitagata have been particularly hard hit by the vagaries of climate change: unpredictable seasons, droughts and declining soil fertility. These shocks severely affect the production of food crops such as millet, maize and beans. Faced with this reality, the cooperative has chosen to become actively involved in promoting more sustainable agricultural practices, adapted to local conditions.

Thanks to the presence of two agronomic technicians on its team, Kitagata raises awareness of environmental issues and supports its members in implementing agroecological techniques: crop rotation,
interculture, use of organic manure, mulching, responsible management of wetlands, rainwater harvesting and storage. This support is provided either on an individual basis, to meet the specific needs of producers, or collectively, in areas specifically dedicated to training, known as “demo gardens”.

A structuring project with SIDI

In 2024, SIDI supported the cooperative in strengthening its social and environmental commitment thanks to a structuring program funded by SSNUP, designed around several complementary components:

– Economic and social: to diversify producers’ income and strengthen their resilience in the face of climate change, the cooperative has set up training in cassava cultivation, an emerging sector with high potential and adapted to local climatic conditions.

– Gender component: training for trainers in the GALS (Gender Action Learning System) participatory methodology was organized. This community-based approach aims to empower women and men, and combat gender inequalities in households as well as within organizations.

– Environmental aspect: the cooperative has launched an agroecology training program, specifically applied to cassava cultivation, for its small-scale producers.

Some key figures about Kitagata

Key Figures Kitagata - 582 producer members
Key figures Kitagata Uganda- women
Key figure Kitagata Uganda - revenue 2024
Key figures Kitagata Uganda - local sales on the market
Key figures Kitagata Uganda - financial training 2025
Key figures Kitagata Uganda - gender training for staff and board members
Key figures Kitagata Uganda - 329 trained agroecology cassava cultivation
Key figures Kitagata Uganda - gardens installed

In Kenya, our partner Yehu Impact Limited receives an award from the international agency MicroFinanza Rating

In Kenya, Yehu Impact Limited, a partner of Soluti, SIDI's subsidiary for East Africa, recently obtained certification for its commitment to protecting vulnerable clients.

What role do international rating agencies play?

Since the late 2000s, rating agencies have developed along the lines of their conventional financial counterparts, to ensure that microfinance institutions follow sound management practices. Indeed, against a backdrop of massive demand for financial services from small-scale entrepreneurs in the informal sector, some players may have seen this as a huge market with more potential for profit than impact… as evidenced by the recurrent scandals in certain countries that have been reported in the media.

These agencies, including MicroFinanza Rating, a pioneering leader based in Milan, play an important role in this respect, since they analyze in detail the data and practices of microfinance institutions, leading to an independent rating. More importantly, they help to spread best practice in the sector, leading to the development of internationally recognized standards. These standards are then set by the Social Performance Task Force, an NGO that brings together all the players involved.

Customer protection: what exactly are we talking about?

One of the major challenges of these best practices is to protect customers. Vulnerable populations, often poorly educated in financial matters, can easily fall into spirals of over-indebtedness, or even be the target of fraud. These standards will therefore ensure that the microfinance institution takes every measure in its power to prevent a beneficiary from becoming over-indebted.

Similarly, microfinance institutions must ensure that customers can fully understand the conditions of the loans (rates and various fees, procedures in the event of arrears, etc.) they are about to take out. For example, microfinance institutions offer contracts in local languages, with explanations given orally and not just in writing. This set of best practices has been brought together in a recognized standard known as the “Client Protection Pathway”.Client Protection Pathway“.

In Kenya, Yehu Microfinance rewarded for its efforts to help the most marginalized populations

Kenya is East Africa’s leading economy. It is a leader in technological innovation to enable financial inclusion of marginalized populations, with the invention of “Mobile Banking”, i.e. the possibility of paying or saving with a simple cell phone, long before the arrival of smartphones. Microfinance has also been developing very dynamically for over 20 years, but without any real regulatory framework.

By obtaining the silver level of ” Client Protection Certification “, Yehu Impact Limited demonstrates that it has met and exceeded a set of rigorous criteria on the quality and ethics of its practices to protect its clients. This recognition reinforces Yehu Impact Limited’s credibility in terms of social impact: the money invested serves the development and autonomy of vulnerable communities, and their economic integration.

Who is Yehu Microfinance?

Yehu Impact Limited is a microfinance institution founded in Kenya in 1998 by Choice Humanitarian, an international NGO. It began its activities by organizing women’s groups and facilitating their access to savings. Today, Yehu Impact Limited reaches over 70,000 beneficiaries, mainly rural women, with the aim of empowering their communities through affordable, sustainable and socially responsible microcredit.

Yehu Impact Limited provides financial education to the most vulnerable populations through a series of training courses on financial management. In this way, the microfinance institution supports the creation of income-generating activities in agriculture, green energies, micro-insurance and other areas.

SIDI is particularly proud of the Yehu Impact Limited teams’ commitment to inclusive finance. This client protection certification is part of the recognition of this microfinance institution’s efforts to empower the most marginalized communities in rural Kenya.

Back from mission: in Ivory Coast, our partners face declining cocoa production

Plants cacao 5 Cote d'Ivoire

Mission feedback: every quarter, a member of SIDI's operational team shares with us a mission carried out with partners and their beneficiaries.

Have you noticed the soaring price of your favorite chocolate lately? Rising prices present a number of challenges for our partners involved in the cocoa sector in Ivory Coast, a country which alone accounts for almost 40% of the world’s cocoa production. Junior Tombe, investment officer, has just returned from a mission to shed some light on the situation.

Since September 2023, I have been in charge of monitoring SIDI’s partners in several West African countries. This is how I discovered Côte d’Ivoire, one of SIDI‘s intervention countries. The changes taking place in the country’s agricultural sector make each mission exciting.

This time, my mission concerned the cocoa sector. We mainly work with certified cooperatives that buy dried and fermented beans directly from producers and then resell them to exporters, often subsidiaries of major chocolate multinationals.

Today, Ivory Coast accounts for between 35 and 40% of the world’s cocoa production (over 50% with Ghana). Any change in production therefore has a direct impact on the world market.

Cocoa futures trading vs soaring world prices

An interesting feature of the Ivory Coast cocoa market is that it is highly regulated. The State, through the Conseil Café Cacao (CCC), sets the price of cocoa at the start of each season: from October 1st to March 31 of the following year for the long harvest, and from April 1st to September 30 for the small harvest. A price scale defines the selling price at all levels of the marketing chain, from planter to exporter. The “bord champ” price is the one paid to growers by the cooperatives. In principle, no one is allowed to buy below or above this price, under penalty of sanctions.

This policy of price stabilization, adopted after the excesses of liberalization, guarantees a minimum price to producers and secures future sales via forward contracts, at prices negotiated six-twelve months before the campaign. However, the last season (2023/24) and the main part of the 2024/25 season were marked by a drop in production: down 25 to 30% in 2023-2024 and lower deliveries for the current season. Caused by climatic disruption – “droughts” alternate with excessive rainfall – the drop in production, coupled with stock market speculation, contributed to the historic surge in international cocoa prices (a tonne of cocoa rose from $4k to $12k between the end of 2023 and April 2024).

Given that the majority of Ivorian cocoa production is sold in advance at pre-negotiated prices, soaring prices have widened the gap between the farm-gate price paid to producers and the market price, ultimately putting a strain on the price stabilization policy. This poses new challenges for cooperatives.

Mature partners capable of anticipating production trends

During my mission, I was impressed by the maturity of our partner cooperatives in the face of these challenges. They have succeeded in delivering 80% of their contracts to buyers in the 2024/25 long harvest.

This demonstrates their level of local knowledge and the effectiveness of their producer loyalty strategies. Against a backdrop of falling cocoa production, which can intensify competition, the benefits our partners provide to their members are decisive in securing the stock: supply of inputs, school loans, training, donations of tools, and so on.

In addition to focusing on non-commercial services, our partners have anticipated the increase in their financing needs. This is how they obtained larger amounts of pre-financing from buyers, in addition to increasing the amounts of their loans negotiated with SIDI (+1.1 M€ of loans in 2024 compared to 2023).

Unlike buyer advances, which are repaid on delivery, and bank loans, which are often amortized monthly, SIDI loans offer flexible working capital, as they are repaid on the last deliveries.

The example of ECAM, an emblematic SIDI partner since 2017

Based in Méagui in southeastern Côte d’Ivoire, ECAM has over 3,000 members and a production capacity of around 7,000 t of cocoa.

During my visit to ECAM members’ plantations, I became aware of the cooperative’s resilience, as some plots have been affected by swollen shoot disease for several years. This disease, which is incurable to this day, destroys the branches and leaves of cocoa trees, leading to a drop in production for producers and, consequently, a fall in income. To counter this scourge, ECAM is promoting crop diversification by distributing vegetable seeds to supplement cocoa in infected areas. This is in addition to the activities of ECAM’s sustainability program: promotion of organic inputs to support productivity, distribution of shade trees, etc.

SCEB, a 100% organic cooperative that could become a new partner

This mission enabled me to meet a potential new partner for SIDI: SCEB, a 100% organic cooperative, quite different from what we see in Côte d’Ivoire.

For SIDI, it’s important to support a partner that chooses organic agriculture in a context where less than 10% of the members of partner cooperatives are organic, and where the European Union, the main buyer of Ivorian cocoa, is strengthening its legal measures to combat deforestation.

The cooperative’s positioning in this niche market, in a country where cocoa is almost exclusively grown conventionally, sets an example for other cooperatives.

All in all, it has been truly enriching for SIDI to support these partners in the cocoa sector in Côte d’Ivoire, who have shown a great capacity to adapt. I’m convinced that the Côte d’Ivoire experience can be a rich source of lessons for other countries and other sectors.

 

Interview by Anne-Isabelle Barthélémy

Image credits SIDI: cocoa plants, shade tree nursery, on the road, a cocoa tree affected by swollen shoot.

 

Resisting in times of conflict: the testimony of Hekima, a partner based in the Democratic Republic of Congo, at SIDI’s General Meeting

Hekima took part in SIDI's Annual General Meeting on June 11 to give us a better understanding of the role of microfinance institutions in Kivu, a region marked by armed conflict and high levels of insecurity, and of how Hekima manages to pursue its activities in this context.

Like every year, the Annual General Meeting is an opportunity for SIDI to invite one of its partners to speak. This year, we were delighted to welcome Laurent Daddy Yamba, Director of the microfinance institution (MFI) Hekima partner of SIDI in the East of the Democratic Republic of Congo (DRC).

A partnership between Hekima and SIDI based on trust

The first contacts between Hekima and SIDI date back to 2013, and the partnership officially began in 2021. It is based on great trust. In terms of financing, SIDI and FEFISOL (European Solidarity Fund for Africa)financent Hekima up to1.5 million since 2021. At the same time At Hekima’s request, SIDI joined its Board of Directors, contributing to the debate on its strategic and controlled development: portfolio growth, digitalization, expansion in a high-risk area.

Hekima and the situation in Kivu

Laurent D. Yamba explained how Hekima continues to work in a difficult context: since January 2025, the offensive led by the M23, a rebel group active in Kivu supported by Rwandan soldiersaishas led to atrocities, displacement of populations, economic losses and widespread insecurity, all of which are undermining the MFI’s activities (see our article on the M23 takeover of Goma and the impact on our partners and the population). On June 27, a peace agreement was signed between the DRC and Rwanda, but the situation remains uncertain.

Founded in 2007, Hekima is an MFI headquartered in Goma and through three three other branches in Bukavu, Kalemie and Lubumbsahi. It had 8,119 active borrowers and a loan portfolio of $9.7 million at the end of the first quarter of 2025. The MFI mainly targets women entrepreneurs (78% of its clientele), notably through group loans (inspired by local tontines) mainly in urban areas, due to the risks associated with the informal agricultural sector.

Since January 2025, cash has been in short supply, so MFIs have become strategic structures, but also particularly exposed, endangering Hekima’s activities and team. Between violence against customers, looting of borrowers’ businesses the economic slowdown and logistical difficulties, Hekima, like all other MFIS in the region, has had to scale back its operations.

Laurent Daddy Yamba is currently in Kinshasa for security reasons. Exchanges with customers have become difficult, as have loan rescheduling. While some MFIs are still holding out, many mutualist structures “only hold out in name. They’re dead.

“Microfinance institutions are dying and need support – and they’ll need it even more tomorrow, when the crisis is over, because we’ll need to restart operations.”

Maintaining business despite conflict

Despite all this, Hekima continues to operate and serve its customers, constantly adapting. Fallback points are organized for fund-raising and distribution, sometimes in hotels. The team, though dispersed, continues to work from home, arranging appointments at the safest times. All remain hopeful and committed to their mission, despite the civil war.

This business continuity has strengthened customer confidence in Hekima. In Goma, from March to May 2025, the MFI was able to finance 476 loans for a total of $246,000, in the form of small loans of around $500, in a region where cash is scarce and crucial for access to healthcare or food. In these complex times, Laurent Daddy Yamba explains how Hekimato loans to as the impact is greater.

What solutions for tomorrow?

Laurent Daddy Yamba also lobbies international and national institutions and national institutions – IMF, World Bank, Central Bank of Congo – for the creation of a recovery fund for the post crisis. In fact, no MFI can cope with the upturn in activity on its own. . This stimulus fundwould three components: 0-rate loans, subsidy funds – either for equipment or for the portfolio – and the rapidly usable financial guarantees. For Laurent Daddy Yamba, such asuch a stimulus fund is essential to restart operations as soon as security conditions allow customers to return in large numbers.

A meaningful testimony

Invite Hekima and his Director Laurent Daddy Yamba to our Annual General Meeting is an honour for SIDI, and also a strong way of expressing our solidarity with our partnerthe Congolese people and microfinance players in Kivu. Today, the challenge is clear: to stand by Hekima and prepare for the post-conflict period.

In Lebanon, the fragile renaissance of Al Majmoua and microcredit, despite financial crisis and war

Return from mission: every quarter, a member of SIDI's operational team shares with us a mission carried out with partners and their beneficiaries. For his first mission in Lebanon, Jean-Baptiste Cousin recounts his discovery of our partner Al Majmoua, in a country still reeling from the financial crisis and recent Israeli attacks.

I took over the monitoring of the SIDI partnership for Lebanon in January 2025. A first mission, scheduled for February, had to be cancelled at the last minute due to the excessive Israeli bombardment of Beirut, despite the truce that had been signed. In May, I was finally able to leave, with my colleague Ariane Bevierre and a delegation from ADIE. During this mission, I discovered the resilience of Al Majmoua, the leading microfinance institution in Lebanon, a partner I know little about, but which is perfectly in line with SIDI’s target.

Banks in Lebanon are no longer operational

When I arrived, I discovered a country where there were no banking services and no financial activities. In 2020, following a massive devaluation, the banks confiscated savers’ assets ($90 billion!). The country’s elite got their money out in time. But the rest of the population found their accounts blocked and were unable to withdraw any money, except in small amounts. In recent months, it was still forbidden to withdraw more than 250 dollars a month. At this rate, it would take 3,000 years for Al Majmoua to recover the $9 million sequestered in his accounts. As a result, no one is depositing money with the banks, which are not granting any loans.

With average incomes plummeting and 30% of the population living below the poverty line, the demand for credit is enormous. The only recourse is money from the diaspora or microfinance. The problem? No donor wants to go to Lebanon any more because of the losses incurred during the crisis.

Lebanon’s financial crisis nearly wiped out our partner Al Majmoua

Before the crisis, Al Majmoua was a highly successful financial institution, managing over 100,000 loans. At the time of the crisis, it found itself on the verge of complete bankruptcy. With the devaluation of the Lebanese pound, its portfolio lost 99% of its value, given the exchange rate imposed. The association lost all its financial assets in the turmoil: $50 million!

The association’s bankruptcy was avoided thanks to the settlement of its debts by the donors, who assumed losses of $50 million, including $1 million for SIDI.

Loans repaid on time and on budget

After almost disappearing, Al Majmoua continues to operate with caution. With the little money it has, it issues modest loans averaging around $500. This enables it to reach more people. By April 2025, it had 23,000 loans outstanding. Of these, 85% are to support economic activity.

In Beirut, I visit a Palestinian chicken seller. The ceiling of her store collapsed during the Israeli bombardments. The loan will enable her to repair the ceiling, so that she can continue her business and gradually pay back her loan instalments.

Against the backdrop of Lebanon’s financial crisis and war, I’m impressed by Al Majmoua’s loan recovery rate of 98%. Including in bomb-ravaged southern Lebanon and the Bekaa plain.

Among the loan beneficiaries I met, I felt a strong sense of identification with Al Majmoua and recognition. For them, nothing is more important than paying, because Al Majmoua is the only entity that can lend them money for their projects. They hope that the association can continue to help them get back on their feet.

A global vision in the fight against poverty

I totally identify with Al Majmoua’s approach.

For Al Majmoua, microcredit is not an end in itself, but first and foremost a means of combating poverty. The association carries out both financial and non-financial activities. To support its members, it acts on various levers: financing, but also education and organization. For example, it offers a financial education program: how to manage a loan, a budget, a forecast. It’s a basic entrepreneurial culture that’s extremely important if you want to get out of poverty.

This posture is not so common in the world of microfinance. But it is totally in keeping with SIDI, which offers both financial services and support.

For me, this global approach is the most effective way to fight poverty. Because poverty has many facets, and credit alone solves nothing.

Supporting the rebirth of Al Majmoua

It’s not easy to think about lending again in Lebanon. SIDI (or rather FID, the guarantee fund backed by congregations, CCFD-Terre Solidaire and SIDI itself) has had to cover major losses. But this seems to me to be the right time to support Al Majmoua in its redeployment, at a time when so few organizations are backing it. It’s an institution that seems to me to have the potential and the qualities to turn itself around.

In a context where poverty has exploded, the demand for microcredit is very high. But so far, no one wants to return to Lebanon. Wouldn’t it make sense for SIDI, which “wants to go where others don’t go”, to get involved again?

It’s our job, as partnership managers, to maintain this balance between preserving the resources of SIDI’s shareholders and fulfilling the mission they entrust to us.

 

Interview by Anne-Isabelle Barthélémy

Photo credits: Philippe Lissac – agence Godong /SIDI; except ADIE cover photo

SICSA, a key player in inclusive finance in Central America

Clients Microfinance (10)

Since 2015, SIDI has been supporting SICSA, a player committed to working alongside microfinance institutions in Central America.

SICSA is a microfinance refinancing institution registered in Panama but with offices in Honduras. Created in 2006 on the initiative of the Central American microfinance network REDCAMIF, it plays a key role in supporting the microfinance sector in Central America. This region, marked by high levels of inequality and chronic political instability, remains one of the world’s most vulnerable to economic and climatic shocks. Microfinance plays an essential role in enabling populations excluded from traditional banking channels to develop a business and strengthen their resilience.

Now active in six countries, SICSA offers a diversified range of financial products and services to some thirty small microfinance institutions (MFIs) in the region. Its added value lies in its ability to act as an intermediary for these MFIs, which are generally not large enough to attract funds from international investors.

By providing financial support to these MFIs, SICSA reaches the most vulnerable populations, helping to reduce poverty through financial inclusion. It focuses in particular on women, young people and rural communities. The aim is to encourage their long-term empowerment by financing income-generating activities such as trade and agriculture.

SICSA attaches particular importance to the quality of its offering and to the satisfaction of its partner MFIs, which is regularly assessed via surveys. It also ensures that these institutions share its social values and ambitions. As a signatory to the Joint Declaration on Customer Protection, it actively promotes best practices in this area. At the same time, SICSA integrates an environmental dimension into its mission by supporting its customers in the development of green financial products.

A strategic and lasting partnership

The partnership between SICSA and SIDI began in 2015 and has grown stronger over the years thanks to SICSA’s stability and social commitment. In 2019, SIDI acquired a stake in the institution, marking a commitment to long-term collaboration. Since then, a SIDI consultant has sat on SICSA’s Board of Directors and taken part in strategic decisions, particularly on social and environmental issues.

In 2022, at SIDI’s instigation, SICSA’s management committee benefited from an awareness-raising session on social and environmental performance. The workshop highlighted good practices already in place within the institution, and highlighted the need to formalize them in order to better leverage their impact.

Following SICSA’s strategic planning for 2023, SIDI offered dedicated support to structure and highlight the organization’s social and environmental commitment. Over the course of a year, SIDI’s PES department worked with the SICSA team to establish a formal framework including social objectives and monitoring indicators. The entire SICSA team was involved in this project, which generated enriching exchanges on the organization’s mission, practices and future ambitions.

Once the objectives and indicators had been defined, in-depth work was carried out on data collection and consolidation tools to ensure effective monitoring of social and environmental performance over the long term. After an initial test of these new tools, and successful data collection by the Sicsa team, the PSE division continued its support by assisting the organization in drawing up their first social report.

A stronger commitment to the future

This dynamic has led to a concrete result: a first social balance sheet that clearly illustrates SICSA’s positioning and social impact in Central America. More than a simple formalization exercise, this work has enabled SICSA to anchor its social and environmental commitment as a central strategic axis of its business.

We are proud to support SICSA in this endeavor and are convinced that this structuring effort will help strengthen its impact in the field. Many thanks to the entire SICSA team for their commitment and vision, and we look forward to continuing this wonderful collaboration!

A découvrir ! Le bilan social de SICSA

Vanilla of Madagascar, a journey at the end of the world with a new partner

Back from mission: Gabrielle Orliange tells us about her extraordinary journey up the vanilla route and a new partnership for SIDI.

Before it enhances our ice creams, cannelés and custards sublime, did you know that vanilla had to travel a road full of pitfalls? For SIDI, Gabrielle Orliange travelled the vanilla trail to meet the cooperatives, from Madagascar’s capital, Tananarive, to the jungle around Mananara. We invite you to follow her, particularly on the day she reaches a particularly isolated area, and discover a new facet of the job of partnership manager at SIDI.

I live in Madagascar where I work part-time as a partnership officer for SIDI. Having identified a possible new partner in the agricultural sector, I needed to meet them in the field. MVE (Madagascar Vanilla Export) is a family-run SME that processes vanilla for export. It buys vanilla from two cooperatives of male and female producers, and also helps them to structure themselves.

After four months of e-mail exchanges, I organized a seven-day mission to meet them and present a detailed report to SIDI’s Financing Committee with a view to obtaining a loan.

MVE is based in Tamatave, about 400 kilometers from Tananarive, the capital of Madagascar where I live. Covering this distance took me a whole day in a bush cab. Then I continued by 4X4 for two more days on bumpy roads, meeting producers in coastal areas.

Meeting in the highlands

On this fourth day, I have to reach a village near Mananara, located on the “high plateaus“1, in a very dense forest. It’s here, in this particularly remote area, that the best quality vanilla grows.

The track is too narrow for a 4X4, and we start with a two-hour ride through the mud. By the time I reach the village, some fifteen growers from the Label Vavasaha cooperative, which numbers around 500, are gathered in the village hall. I can tell they’re eager to show me their plantations. To do so, we have to go deeper into the jungle. We start by taking a pirogue, before finally clearing a path with a machete.

Once we arrived, they were very proud to show me their plots, where Madagascar’s finest vanilla is grown!

I can see big green beans hanging from the vines wrapped around the trees. Vanilla is a very demanding crop, requiring constant care. Native to Mexico, it has to be cut and the flowers fertilized by hand to produce vanilla.

At the end of the world

I’m struck by the isolation of these producers. It’s like being at the end of the world. Madagascar is already a lonely island. The vastness of its territory and the area’s lack of accessibility add to this feeling.

In a way, this isolation, which protects them from theft, suits the growers. But arriving after four days of acrobatic transport, I understand the logistical cost of growing vanilla. I have even more respect for MVE, forced to deal with this reality and its share of unforeseen events: broken-down cars, fuel supply problems. It’s not easy to get vanilla from so far away.

The second thing that stands out for me is how the value of vanilla has helped generate wealth. Even though these areas are very isolated, I see motorcycles everywhere, satellite dishes and 4X4s. Goods that are very rare on the agricultural plateaus near Tananarive, a less landlocked but poorer region that mainly produces rice.

Here, everyone grows vanilla, from a few beans to several kilos. This windfall benefits everyone, even if some benefit more than others.

For male and female growers, the difference lies in the way they sell their produce. Those who work alone find it harder to sell their produce at a good price. But those who manage to form cooperatives are able to negotiate and sell their produce at a better price. MVE is keen to buy vanilla from cooperative producers at a higher price than the market price.

Tour of the processing site

On the way home, I stop off at the final processing site in Tamatave. The MVE warehouse is located in a discreet, safe and secure area, with guards.

Here, vanilla is sun-dried for several weeks. The beans are then sorted before being cured in caissons to develop their aroma. After several months, they are checked and graded by quality before being packed for export.

In the final stage, the vanilla is sent to Tananarive before being shipped to Europe. The fragile beans travel by air. The more resistant powder can be shipped by boat. It takes no less than 90 days on average to reach France from Tananarive.

An extraordinary mission

This mission was a real discovery for me, even though I live in Madagascar. I’ve never been so far into the country. The other partners we work with on the island in the microfinance sector are much more accessible. This allows us to strike a balance. Although the partnership with MVE is financially more risky for SIDI, it fulfils our vocation of supporting the agricultural sector and strengthening this type of business.

As it is a structure that has never benefited from investments, SIDI’s loan represents real added value for it. This is what we call a “impact partner”, and I was able to measure its social and environmental commitment on the spot.

The loan was disbursed in the summer of 2024. Thanks to it, the vanilla could be purchased from the producers. As it does every year at this time, MVE is awaiting approval to export to European buyers. The sale of vanilla will allow MVE to repay the Sidi loan. If they manage to repay and meet the deadline, the loan can be renewed in 2025, enabling them to buy vanilla this summer.

 

Interview by Anne-Isabelle Barthélémy

 

1. These are high plateaus, but they have nothing to do with the Malagasy high plateau region, which rises to 1,500 m.

The M23 takeover of Goma: a direct impact on the population and the activities of SIDI’s partners in Kivu

Hekima RDC

For several weeks now, the Kivu region of the Democratic Republic of Congo has been experiencing another major crisis. The capture of the town of Goma by the M23 armed group, supported by Rwandan soldiers, has left the population into a dramatic situation: at least 2,900 people were killed on February 07, 2025, according to the United Nations. Large-scale displacements, economic losses and widespread insecurity punctuated the daily lives of thousands of families.

A region marked by chronic instability

Bordering Uganda, Rwanda and Burundi, Kivu has been mired for more than twenty years in an almost permanent conflict situation, which maintains a chronic instability hampering the socio-economic development of the territory and its inhabitants. This particularly complex situation in Kivu has made it a priority region for SIDI, which has seven local partners covering all its fields of intervention: financial inclusion (microfinance institutions such as Paidek, Guilgal, Hekima, credit cooperative unions such as COOCEC, promoters of solidarity mutuals), agricultural value chains (organic coffee and fair trade cooperatives Muungano and CPNCK) and the fight against climate change (through an innovative partnership with Altech, a renewable energy supplier).

SIDI partners directly impacted

The capture of Goma, the capital of North Kivu, has had a direct impact on our local partners, in particular Hekima, a microfinance institution (MFI) which SIDI has been supporting for several years and which is headquartered in Goma. This MFI plays an essential role in granting group loans to women entrepreneurs. Hekima reaches nearly 15,000 beneficiaries, 74% of whom are women, who thanks to appropriate financing can develop their activities and strengthen their economic resilience. Today, however, operations have ground to a halt, and teams have to adapt to protect themselves and their beneficiaries, while maintaining a minimum level of activity. The situation for SIDI’s partner coffee cooperatives is equally dramatic, even though the season got underway at the end of January. Muungano, the coffee cooperative based in Kiniezire, was unable to start collecting coffee cherries from its 4,245 member producers because of the fighting. For its part, the CPNCK cooperative, based on the island of Idjwi on Lake Kivu, no longer has access to the financial resources blocked in Goma, but which are nonetheless necessary to pay the 2,300 producers.

SIDI, working alongside its partners

Above and beyond the impact on our mission as a socially responsible investor, it is above all the daily lives of local populations that are affected. In times of crisis, humanitarian and economic needs are immense. At SIDI, we remain mobilized to support our partners in Kivu as much as possible, in the hope of a rapid return to stability. We also salute the courage of the local teams and populations who continue, despite everything, to commit themselves to maintaining economic activity in Kivu.

 

photo credit: Philippe Lissac – Godong agency / SIDI