Boosting efforts across focus sectors and strengthening partners

What is different between Oikocredit when it first started in 1975 and now?

The biggest difference is our scale. In the beginning, we were a relatively small movement. We had a grand idea to help make a difference in the lives of low-income people, but the amount of money available was very limited. We started with funding from church members and realised we could reach many more people if we grew our investor base. When you look at where we started, with only a few members of the church, to the amount of people involved now, it’s quiet exciting. With our 57,000 investors, you could fill a stadium.

Impact investing is much more prevalent than it was when Oikocredit first started in 1975. What makes Oikocredit different than other social investors?

Oikocredit has always been about – and still remains true to – its focus on social impact. It’s the reason we exist. We see that this desire for social impact has grown and society as a whole wants to be more responsible, but Oikocredit doesn’t just want to be responsible. We really want our investments to have the highest social impact they possibly can, while at the same time offering a fair financial return. So while some organisations have adopted this approach, it has been at our core from the beginning. 

What are some of the latest changes or developments at Oikocredit?

As part of our updated strategy, our focus is on adding more value to our partners. Together with them, we want to find solutions to issues affecting the development of their business.

In the past, partners would emerge and we would finance them, then gradually we would support them with our capacity building initiatives. And while our capacity building support continues to increase, we know that there is more to be done to support our partners. We are now looking at how we can help solve strategic dilemmas facing their businesses.

Take sustainable cocoa, for example, if farmers’ income levels don’t go up, we need to figure out why. And to do that we need to look at the entire value chain to see what the problems are and how we can address them. Because if income levels don’t go up, then they don’t have a chance to improve their lives. So it can’t just be about financing, nor just about cocoa, the problems need to be tackled in a much more multidisciplinary manner if we’re really going to make a difference in people’s lives. That’s what we’re doing and will continue to do in order to better support our partners.

Oikocredit just had its AGM in the Netherlands. What was discussed and what was the outcome?

This is the third AGM that I have attended and it was a really good one. I enjoyed seeing people excited about the future.

While Oikocredit has been going through a season of change as it implements its updated strategy to improve its financial results, our members have been extremely understanding and supportive. People see the direction we’re going in, and they are enthusiastic to take that journey with us.

With that willingness and positivity there was plenty of room for discussion on what is happening in the world and what Oikocredit is doing to help make a difference. We also discussed various topics such as Oikocredit’s recent focus on fintech (financial technology).

People also agreed to the Managing Board’s proposal of a 1% dividend. There wasn’t too much debate here and I think that’s because we’ve been in regular conversations with our members about where we are financially and how we’re addressing various issues with our updated strategy. 

What is Oikocredit excited about as it continues to implement its updated strategy?

We always get excited about finding new partners that are helping people in low-income communities carry out their lives and dreams. And we’re also excited about adding even more value to our partners, as I mentioned before. There is a lot of eagerness to support our partners in the best way possible, especially among our colleagues who are working closely with partners in the regions.

Also, I know this is much more technical, but I’m personally excited about the processes that we are improving. It’s fantastic to see how people across the organisation are also eager to improve things. With our new processes in place, we will be able to support our partners in a more timely and efficient manner. We are getting faster and more agile. We are also getting better at monitoring our partners. This is not to police them but to help them deliver on their social missions. At the same time, we want to share more with our members, investors and the broader social impact investing network, about the great work that our partners are doing.

Are there any areas that reflect the direction Oikocredit is heading and how does that differ from before?

Something new for us would be the changes in our renewable energy strategy. When we started in 1975, most people weren’t as concerned about what is happening to the earth. But nowadays this is a major concern, and at the core of what we do.

We don’t only want to invest in projects for the environment, we want to make sure that our investments in this area are done in a social way. There are many big renewable energy projects that are being funded, but what’s really needed is clean energy for low-income communities. Clean cooking, a new area for us, is a great example of this. Nearly 4 million people die prematurely each year from illness linked to air pollution from cooking, most of which are those living on the lowest incomes. Clean cooking is not only better for the environment, but it can save lives, and that’s where we want to invest.

Another area we’ve adjusted, as I shared before, is looking at the entire value chain for our agriculture partners. We used to be proud of offering financial support to cooperatives or smallholder farmers, because no one wanted to give them money and we did, but we’ve realised that is not enough. We see that small cooperatives and farmers face major challenges economically, making it difficult for them to survive. A lot of this has to do with the many inefficiencies in the agricultural value chain, an area we can offer insight and support.

Looking at the environmental aspect of agriculture is also key for us, as it uses a lot of the earth’s resources but at the same time, the world needs to eat. So we can help our partners be more efficient with water and other resources.

Why should people care about Oikocredit’s work when there are so many different issues going on in the world?

It’s true, unfortunately there are many pressing issues that we need to fight for, but I would argue that Oikocredit’s work is a major one. I would also say that many issues are connected. When you look at climate change, for example, some of its greatest burdens are ending up with the people we work for. So that’s why we’re also addressing environmental issues when carrying out our work.

But it’s important to remember that you don’t have to choose only one cause. Pick a few that you think are worthy, and within that, the work that Oikocredit does should be included.

Also, Oikocredit is asking for investments. We’re saying that if you want your money to be used for good while you don’t need it, then leave it with us. And by the time you want your money back, we will have done great things with it. While we focus on offering investments, donations are of course also very welcome to help us fund our capacity building programmes. 

If everyone does a bit of good with their money, then we can reach a lot of people.

Oikocredit is getting ready to publish its Impact Report in September, can you give us a preview of what it will include?

This year’s report reveals that our partners reached 38 million end-borrowers in 2018, an increase from the 36 million reached in 2017. The amount of rural and female clients that our partners reached also went up.

In addition, we’re happy to see that in renewable energy, the amount of households with clean access to energy increased from 15,600 to nearly 71,700 in 2018.

As for the report itself, it’s actually a new report, combining the Social and Environmental Performance Report and the At A Glance publication. It has a new look including more infographics to better showcase our indicators.

There’s also a new section where we talk about our contribution to the United Nations Sustainable Development Goals and a section dedicated to capacity building, as this is an increasingly important area of our work.

These are only a few of the highlights from the 2018 report, but we’re looking forward to sharing more in September.