MICROCAPITAL BRIEF: European Solidarity Financing Fund for Africa (FEFISOL) Launched

The European Solidarity Financing Fund for Africa (FEFISOL), a rural microfinance fund supporting fair trade and organic small business, has been launched by the European Investment Bank (EIB), Agence Française de Développement (AFD) and several other development bodies. The EUR 15 million (USD 21.6 million) FEFISOL will provide microfinance funds for lenders serving poor rural households across Africa and help finance small-scale investment in agricultural activities through local MFI’s.

Solidarite International pour le Developpement et l’Investissement (SIDI), a French NGO which provides financing and technical assistance to organizations in developing countries, will manage FEFISOL, while Belgian development organization Alterfin and Etimos of Italy will provide support for the fund, through their combined experience working with MFI’s, agricultural cooperatives and small businesses in emerging countries. FEFISOL, expected to double in size by 2013, will assist microfinance institutions that help poor households in rural areas where no formal lending exists.

FEFISOL will fund microfinance institutions and producer organizations across the continent in local currency. African microfinance bodies will benefit from a subsidized EUR 3 million (USD 4.32 million) loan provided by AFD that absorbs foreign exchange loss on local currencies. SOS Faim and the African Microfinance Institutions Network (MAIN) will assist in this process.

EIB will provide EUR 5 million (USD 7.2 million) for FEFISOL to help develop microfinance operations and small holder organizations in rural Africa and improve access to fair trade and organic export markets. Proparco structured the equity investment of The Investment and Support Fund for Africa (FISEA) for a total consideration of EUR 5.4 million (USD 7.77 million). The Norwegian Microfinance Initiative (NMI) will also make a EUR 1.8 million (USD 2.59 million) investment in the fund along with unspecified amounts from Crédit Coopératif, Societa Europea Finanza Etica ed Alternativa (SEFEA), Développement International Desjardins (DID) and Fondation Caritas France.

By: Philip E. Hughes III, Research Assistant

About FEFISOL:
A specialised rural microfinance Fund created with the aim to provide medium-term financing to rural Microfinance Institutions and small producer businesses active in fair trade, organic products and food production.

About EIB:
The European Investment Bank (EIB) was created in 1958 as the long-term lending bank of the European Union. In addition to supporting projects in EU member states, its main priorities include financing investments in likely future member states and EU partner countries, principally in the area of small and medium-sized enterprises. In 2010, the EIB approved projects with a total value of USD 110 billion. According to its website, “the EIB operates on a non-profit maximizing basis and lends at close to the cost of borrowing.”

About AFD:
The French Development Agency (AFD), a public agency, has been working to combat poverty and promote development in Southern Hemisphere countries for over 60 years. The AFD has a presence in the field in over 50 countries and finances and supports projects that improve the living conditions of the population, support economic growth and protect the planet. In 2010, the Agency invested over EUR 6.8 billion (USD 9.79 billion) in financing initiatives in Southern Hemisphere and overseas countries.

About Alterfin:
Alterfin invests in microcredit institutions and associations of fair trade producers in Africa, Asia and Latin America.

About Etimos:
Consorzio Etimos provides financing to microfinance institutions, popular and village banks, producers’ cooperatives, associations, universities, institutes for the promotion of social issues in developing countries, foundations, public and religious bodies, and fair trade shops.

About SOS Faim:
SOS Faim is a Belgian independent NGO created in 1964 with a mission to support farmer agriculture and its actors in developing countries.

About PROPARCO:
PROPARCO is a Development Finance Institution jointly held by Agence Française de Développement (AFD) and public and private shareholders. Its mission is to catalyze private investment in emerging and developing countries with the aim of supporting growth, sustainable development and the achievement of the Millennium Development Goals (MDGs). PROPARCO finances investments that are economically viable, socially equitable, environmentally sustainable and financially profitable.

About FISEA:
FISEA is an investment fund that makes equity investments in businesses, banks, microfinance institutions and investment funds operating in Sub-Saharan Africa. It aims to be a lever for economic growth in this region. The fund has an annual investment target of EUR 50 million (USD 71.98 million) and is expected to finance roughly sixty projects over the next five years and create over 100,000 jobs in Africa.

About NMI:
The Norwegian Microfinance Initiative (NMI) is a strategic partnership between the Norwegian public and private sectors that invests in microfinance institutions (MFIs) in developing countries and provide professional assistance and technical support for these institutions.

About SEFEA:
The Société Européenne de Finance Ethique et Alternative (SEFEA) is an Italian cooperative, set up in 2002. Its members are credit organizations and institutions, cooperatives and companies that aim at promoting a socially and environmentally sustainable economic development.

About DID:
Développement international Desjardins (DID) is a component of Desjardins Group, the leading cooperative financial group in Canada. A pioneer in the deployment and development of microfinance in developing and emerging countries, DID specializes in providing technical support and investment for this sector with the goal of making secure and diversified financial services available to poor communities.

Sources and Additional Resources:
[1] Source Article: IEWY News: “Africa’s first microfinance fund for sustainable farmers launched”,
http://www.iewy.com/30873-africa’s-first-microfinance-fund-for-sustainable-farmers-launched.html

FEFISOL:
http://www.eib.org/projects/pipeline/2010/20100386.htm

EIB:
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Eur…

AFD:
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Age…

SIDI:
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Int…

Alterfin
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=ALT…

Etimos:
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Con…

SOS Faim:
http://www.sosfaim.org/

African Microfinance Institutions Network:
http://www.mfiain.org/

PROPARCO:
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=PRO…

FISEA:
http://www.proparco.fr/lang/en/site/proparco/Accueil_PROPARCO/fisea-prop…

NMI:
http://www.nmimicro.no/