[CP] EIB lends €5 million to FEFISOL II fund

[CP] European Investment Bank lends €5 million to FEFISOL II to finance Africa’s agricultural sector

 

Building on the success of FEFISOL, the first impact fund dedicated to the rural world in Africa, which closed in 2021, its two founders, SIDI and Alterfin, have been actively working on the creation of a new fund: FEFISOL II, created at the end of 2021.

Today, the EIB is announcing its entry into the capital of FEFISOL II for an amount of 5 million euros! This renewed commitment will enable the Fund to pursue and deepen its social mission.

FEFISOL 1 has had a considerable impact over the past decade:

– 86M euros disbursed, of which 93% in Sub-Saharan Africa ;

– 75% of average outstandings in local currency ;

– 92 customers financed in 25 countries;

– 139 technical support projects carried out for 51 customers.

FEFISOL II builds on FEFISOL I’s pioneering support for rural microfinance and the agricultural sector. The challenge posed by the lack of financing for rural areas in Africa, and for farmers in particular, remains crucial.

In Africa, less than 5% of loans disbursed by traditional financial institutions are earmarked for the agricultural sector, and less than 10% of farmers have access to credit. And this despite the fact that around 48% of the population depends on agriculture. Although it makes a major contribution to many African economies, the agricultural sector is still poorly served financially, as it is often perceived as too risky or not profitable enough.

Rural communities face multiple challenges: the remoteness of financing, but also the growing risks induced by climate change, as well as the financial inclusion of women, who represent 60% of the agricultural workforce in Africa without often being able to benefit from the same rights as men.

FEFISOL II is structured to provide financial and technical support for solutions designed locally to meet these challenges. FEFISOL II will be implemented in over 25 countries in sub-Saharan Africa, and is expected to support 130 microfinance institutions or agricultural companies and cooperatives sourcing from smallholders and certified fair trade or organic.

Other investors are joining FEFISOL II for a round of financing that will close at the end of March: the first investments will be effective from May!

 

 

Successful 5th African Microfinance Week in Kigali

[chapeau]The 5th edition of African Microfinance Week brought together nearly 600 inclusive finance professionals from 55 countries in Kigali, Rwanda. A tremendous success![/chapeau]

African Microfinance Week (AMW) is the largest conference on inclusive finance in Africa. Organized every two years in a different African country, it features conferences, training and workshops, an innovators’ village, and of course the investor fair in which the SIDI team plays an active part. A networking event dedicated exclusively to investors and African MFIs, the investor fair enables SIDI to forge future partnerships.

The SAM is an essential event for exchanging and sharing expertise on inclusive finance. The theme chosen for this year’s event was resilience: ” You’re not born resilient, you become resilient: strengthening inclusive finance to better overcome crises “. This was the first time the SAM had been held in Rwanda. This choice has enabled us to shine the spotlight on a country that has shown tremendous resilience and a phenomenal ability to adapt.

As always, the SIDI team was on hand. The emotion of being back in the flesh, and seeing the success of our participation, was palpable.

Why so many people? The impact of microfinance has always been the subject of debate. It’s a fact that microfinance is resilient, that it continues to provide concrete solutions and that, thanks to the leverage it generates, it enables individuals to define their own destiny.

At this 5th edition, everyone was able to gauge the vitality of African MFIs. In the face of the health crisis, MFIs ultimately managed to cope with the liquidity problems they faced. This shows the considerable work carried out by MFIs over the past 20 years, making them already resilient. The current crises – whether the health crisis linked to Covid19, the ensuing economic crisis, the issue of access to employment for young people, or the crucial challenge of adapting to climate change – must also be an opportunity to change practices, innovate, and advance the solutions that enable this adaptation. From the investor’s point of view, crises can have the beneficial effect of encouraging us to get closer and more involved together.

SIDI continues to forge ahead, placing solidarity at the heart of the economy and finance. Invest in small MFIs, establish long-term partnerships, share the partners’ vision and risk, so that these partnerships serve to consolidate the structures. Supporting the MAIN network in its capacity building program for its members – over 125 African MFIs! Defend the importance of technical assistance and support in response to the needs expressed by partners, to serve an inclusive economy in a process of ecological and social transition.

Some pictures of the event:

(c)GODONG // (c)SIDI

A strong commitment for Forest Fruits in Zambia

[chapeau] Despite the health situation and the temporary suspension of field trips, SIDI is continuing its activities and, at the end of the year, opened a new partnership in Zambia with a company that processes and markets honey products. For SIDI, this is both an opening to a new country of intervention, and a major first in terms of support for the beekeeping sector.[/chapeau]

Since 1998, Forest Fruits has been collecting, processing and marketing beekeeping products for local and international markets. It buys raw honey produced by certified organic (Ecocert) Zambian beekeepers at a remunerative price, and processes it at its Mwinilunga factory. The social enterprise then transports the production to its packaging plant in Lusaka, where the finished product is exported to the sub-region (Zambia, Botswana and South Africa) and abroad. In addition to marketing forest honey for direct consumption, Forest Fruits is developing several types of processed honey-based products (beeswax flakes, candles, honey mustard, etc.). In recent years, thanks to technical support from FEFISOL[1], the company has developed the production of honey vinegar by fermenting lower-quality honey.

Most of the company’s business and its supplier beekeepers are located around the Mwinilunga district. In this isolated region with little economic dynamism, beekeeping is traditionally practiced and represents a considerable source of income for families. Thanks to Forest Fruits, producers benefit from higher remuneration and training to improve the quality of their honey and diversify their agricultural production (trials underway for tea tree production, for example). To develop the region, the company, which currently employs 63 people, also favors local recruitment, and training to enable its employees to upgrade their skills.

Forest Fruits’ business is directly linked to the bees’ honey production periods. Harvesting is spread over two periods of the year, depending on the flowering cycle of the Zambian forests in which the honey is harvested. In such periods, the company needs working capital to enable it to pay producers in cash. FEFISOL has been funding Forest Fruits campaigns since 2014, but this year the fund, which is in transition, was unable to commit to funding for 2021. SIDI has therefore decided to step in and support the next honey campaign by granting a line of credit of $750,000 over 12 months. This loan, backed by several regional and international buyers, will enable the company to purchase 600 tonnes of raw honey at a remunerative price for beekeepers as soon as the harvest is complete.

Despite the current context, SIDI continues to innovate by opening this partnership with Forest Fruits, to contribute to the economic, social and environmental development of a remote region of Zambia.

To find out more about the Forest Fruits social enterprise: https: //www.zambezigold.com/

[1 ] European Solidarity Fund for Africa, managed by SIDI.