Oikocredit is ready for the future [interview]

Oikocredit just held its annual general meeting (virtually, due to the pandemic). What was your impression of the event?

I think it was a very effective meeting. This was our second AGM held virtually, due to the pandemic, so we were able to apply some of the lessons learned from last year. This allowed for more and better interactions with members. And although a virtual meeting continues to be different form an in-person meeting, we managed to have a good exchange of ideas and perspectives.

For me personally it is a pity that I won't be able to say farewell to all of our wonderful members in a more personal way, but my pity disappears in the light of the serious pain the pandemic has caused others.

If you look back to when you first joined Oikocredit, what were some of the challenges the cooperative was facing at the time?

Firstly, Oikocredit was, and had been for a few years, in this new financial environment with extremely low interest rates. The majority of our income comes from interest, so with low rates you get low income, but your cost levels remain the same. Secondly, there was increased competition in impact investing and therefore a lot of liquidity among social investors, including Oikocredit.

Thirdly, the cost of doing business was increasing. Regulatory costs in the aftermath of the financial crisis were going up. The complexity of lending money was increasing. With increased costs, the minimum scale that you need to have to operate in a particular country or offer a particular instrument to make it viable, also goes up.

How did Oikocredit aim to address these challenges?

There was a natural sequence of how we had to deal with these various challenges. We were spreading ourselves too thinly. We needed to assess where we wanted to continue to work, what we wanted to offer and in which segments.

We ended up selecting 33 countries where we said we could make the biggest difference in our focus sectors financial inclusion, agriculture and renewable energy. Winding down the relationships with partners in countries where we’ve decided not to work is still ongoing and we will see our obligations through to the end, or find others to replace us.

In addition we decided to invest more in the capabilities of our people and our organisation and rolled out continuous improvement programmes and change initiatives to become better at serving our partners and investors. We also set out to be a catalyst that brings together different actors for the benefit of low-income communities. This is a concept we will continue to build on in our new strategy for 2022 to 2026 which we’re currently developing.

To sum up, we’ve come a long way and our cost levels are much more bearable. Our way of agile working helped us tremendously throughout the pandemic and the fact that we chose to concentrate our countries and sectors has enabled us to really focus on our partners and their needs.

You mention that Oikocredit is developing a new strategy, where are you in this process?

The 2022-2026 strategy is currently unfolding and I think the process we are going through to develop it is fantastic. We have really, true to the essence of a cooperative, involved as many people as we could in the process: members, partners, the support associations and our own staff. Over the last few weeks, I had the pleasure to facilitate three strategy dialogue sessions: two with staff and one with members. The small size of these groups allowed for a more intimate conversation, and it was really fantastic to notice the enthusiasm and commitment of ‘our people' actively taking part in defining the future of Oikocredit.

We are now testing the community-based approach that has come out of this strategy process, for example through pilot projects. Our aim is to have the strategy finalised in time for our general meeting at the end of the year.

What is your outlook for the remainder of the year?

I think financially this will be a substantially better year. Last year was an exceptional year because of the pandemic, but things are improving and we took steps from the beginning to ensure that Oikocredit would get through it. Our Director of Finance & Risk shared about this in great detail in her recent interview. While there is continued uncertainty due to the pandemic, our performance in first few months of 2021 gives us confidence about the financial position of Oikocredit, and we are doing a lot of work in our new strategy to ensure that this is also the case for the future.

How do you look back at your time with Oikocredit?

I would honestly say that I'm very happy and proud of what we have been able to do. We made a lot of good changes to professionalise the business, which we owed to ourselves, our investors, and our partners.

And I think, perhaps a little controversially, that the pandemic proved that what we had done with the organisational changes was needed. The impact of the pandemic would have been much worse had we not made the changes we made.

I also have to thank our investors and support associations – through which many people invest. Their support and loyalty became even more clear during the pandemic where despite the fact that there is no dividend, they continue their support and stick with us, which is amazing.

I am extremely happy with all the people that I have met and that I have been able to work with. Oikocredit is a very unique organisation with wonderful people that are passionate about making a real and enduring positive impact in the world.