At the forefront of sustainable development using investors’ capital

At the forefront of sustainable development using investors’ capital

2 July 2015 13:51 - by Monica Middleton - 0 comments

Tags: , ,

40 years of existing is reason enough to celebrate. But even more so when one’s birth marked the beginning of a world-wide movement founded on the principles of justice, self-reliance and economic empowerment for all, with a mission to alleviate conditions of poverty by providing credit and resources to the most disadvantaged, financially-excluded, “unbankable” communities in the world.

Oikocredit were joined by 300 guests from over 30 countries at the St. Elizabeth's Church in Berlin-Mitte on 11 June 2015 to help reflect on its 40 years as a pioneer and world-wide leader of private social impact investing, and to discuss sustainable development over the next 40 years.

Pioneering social investing for development purposes

It was in Berlin in 1974 that the World Council of Churches endorsed the establishment of an international development cooperative (later Oikocredit) to plug the gap in development finance instruments at the time. With starting capital of just over USD 1 million and a small secretariat of four staff, Oikocredit was born. Dr Konrad Raiser, former general secretary of the World Council of Churches (WCC), who was instrumental in bringing about the cooperative, gave the opening speech at the event

Dr Konrad Raiser, former general secretary of the World Council of Churches (WCC), giving the opening speech

He called for greater investment from all types of individuals and organisations outlining the original plea for just 2% of liquid or risk capital to be placed in social impact investments for development purposes. His rationale remains the same today as it was 40 years ago: "I believe that strengthening the independence of the poorest, most dependent members of the global community is the key to achieving greater justice, sustainability and economic growth for all" Raiser said.

His thoughts were echoed by a personal video message from Queen Máxima of the Netherlands who also serves as the United Nation’s Special Advocate for Inclusive Finance for Development. Queen Máxima praised the work of Oikocredit and reiterated that “it is as important today as 40 years ago”.

Queen Máxima of the Netherlands' video message for Oikocredit

Partners and Thought Leaders from Sustainable Development

Guests on one of the panels included Violeta Stevens, head of supply chain management at Oikocredit partner and UK Fairtrade brand Cafedirect; and Jamie Hartzell, founder and chairman of Oikocredit partner Ethex, Chairman of Oikocredit partner and UK Fairtrade brand Divine Chocolate, as well as being an investor in Oikocredit himself.

Jamie challenged Oikocredit to go for even greater growth and scale over the next 40 years, “not with the intention of becoming like mainstream banks, but with the intention of encouraging more banks to become like Oikocredit”.

Other contributing Oikocredit partners included Ranganayakulu Bondavala, founder of Oikocredit partner Thrive Solar in India, who thanked Oikocredit for investing in his small solar-powered pocket lights in support of his ‘one child one light’ campaign.

A message from Oikocredit partner Thrive Solar in India

Helmy Abouleish, Managing Director of the Egyptian cotton enterprise Sekem was streamed by video, thanking Oikocredit “for supporting him during the Egyptian revolution when all others turned their backs”.

Helmy Abouleish from Oikocredit partner SEKEM

Academics Christian Felber from the Economy for the Common Good, and Maike Gossen from the Institute for Ecological Economy Research, led discussions on alternative economies for the future.

Christian Felber called for a new economic system where the primary objective of all organisations/governments/economies would be ‘to do good/promote wellbeing/reduce carbon footprints, poverty’, with money being a means to achieve this, rather than the primary goal in itself.

Maike Gossen encouraged the need for a Sharing Economy where goods and services are redeployed during downtimes - for example, tools and equipment which are not in constant use at various points along the agricultural value chain.

Christian Felber from the Economy for the Common Good, Maike Gossen from the Institute for Ecological Economy Research with Oikocredit Germany's Matthias Lehnert

Other academics and experts joined for discussions on the salient global issues of Financial Inclusion; Food Security and Agriculture; and Climate Change and Renewable Energy – all areas in which Oikocredit deploys its investors’ capital to help tackle some of the many challenges we face as a civilisation.

Solid financials for the future

In the past 40 years Oikocredit has disbursed over € 2bn in development financing through 1670 partners. In the past five years, its outstanding capital has increased by nearly a third to €900m, investing in over 60 countries through microfinance, agriculture, small trade, fair trade and renewable energy partners, with the aim of alleviating poverty and enhancing economic empowerment, particularly for women.

An ever increasing social and environmental impact

Social performance and support to partners to further strengthen their sustainability remain Oikocredit’s core priority, including impact studies to assess the long-term benefits of social financing.

In 2014, Oikocredit was able to reach 37 million people with financial and technical support. From data reported by 591 of Oikocredit’s partner organisations in 2014, investments in low-income countries were up 16% to € 109m; borrowers reached through microfinance partners were up 32% to 37m; female borrowers were up from 81% to 86%; and 50% of those reached were living in rural areas. Of Oikocredit’s partners involved in production and services (ex microfinance), 41% hold a ‘green’ classification. Of those production and services partners, 73% reported having an environmental policy, with 35% having at least one fair trade certification.

Oikocredit social performance and credit analysis director, Ging Ledesma, said, “In 2014, we focussed on growing our outreach in low-income countries, particularly to rural and female borrowers. Over the next two years we’d also like to see over half of all our production and services partners holding a ‘green’ classification”.

Through capacity building as well as other initiatives, Oikocredit will support partners in their efforts to improve the lives of low income earners and their communities. “This will include improving food security for farmers by nurturing cooperative enterprises and increasing levels of productivity while being mindful of environmental impacts and the effects of climate change,” Ms Ledesma added.

Throughout 2014, Oikocredit provided € 1.9m in capacity building funds, focussing on the strengthening of its social performance mentoring programme and piloting new programmes for agricultural enterprises.

Comments

Leave a comment!

Italic and bold

*This is italic*, and _so is this_.
**This is bold**, and __so is this__.

Links

This is a link to [Procurios](http://www.procurios.nl).

Lists

A bulleted list can be made with:
- Minus-signs,
+ Add-signs,
* Or an asterisk.

A numbered list can be made with:
1. List item number 1.
2. List item number 2.

Quote

The text below creates a quote:
> This is the first line.
> This is the second line.

Code

A text block with code can be created. Prefix a line with four spaces and a code-block will be made.