Oikocredit Empowering Communities with Financial Services

Oikocredit provides financial services to communities in need, helping them build a better future. They offer loans to small businesses and individuals, supporting economic growth and development.

Their approach is unique, as they invest in social enterprises and cooperatives, which are owned and controlled by the people they serve. This ensures that the benefits of their investments stay within the community.

Oikocredit's focus is on empowering communities, rather than just making a profit. This is evident in their commitment to social and environmental sustainability.

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Oikocredit was founded in 1975 on the initiative of the World Council of Churches under the name Ecumenical Development Cooperative Society (EDCS).

The goal was to mobilize church reserves for development promotion, which initially met with skepticism from church financial and development experts.

However, many people from churches throughout Europe believed in the idea of Oikocredit and established Oikocredit support groups in the late 1970s.

Today, the support groups provide the majority of Oikocredit's member capital.

Oikocredit was founded in 1975 on the initiative of the World Council of Churches under the name Ecumenical Development Cooperative Society (EDCS).

The goal was to mobilize church reserves for development promotion, an approach that initially met with skepticism from church financial and development experts.

Many people from churches throughout Europe believed in the idea of Oikocredit and established Oikocredit support groups in the late 1970s, which allowed private individuals and organizations to invest in Oikocredit.

Today, the support groups provide the majority of Oikocredit's member capital, making them a crucial part of the organization's financial structure.

We're a cooperative organization that provides microfinance and other financial services to small-scale entrepreneurs in developing countries. We work with over 40 partner organizations across Africa, Asia, and Latin America.

Our approach is based on a strong commitment to social justice and sustainability. We believe that everyone deserves access to fair and affordable financial services.

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We've been around since 1975, and our headquarters is located in the Netherlands. We're proud to have a global presence with offices in several countries.

Our focus is on supporting small-scale entrepreneurs, particularly in rural areas, where access to financial services is often limited. We provide loans, savings, and other financial services that help them build their businesses and improve their lives.

Our cooperative model allows us to make decisions that benefit both our investors and the people we serve. We're owned by our investors, who are mostly individuals and organizations that share our values.

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The Opportunity International & Oikocredit Education Finance Collaboration is a powerful partnership that addresses the lack of capital released into the education sector in low-income countries.

Founded in 1971, Opportunity International is headquartered in Chicago, Illinois, US, and Oikocredit, founded in 1975, is headquartered in Amersfoort, Netherlands. Both organizations work in more than 30 low- and middle-income countries around the world.

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This collaboration is unique given both Opportunity International’s & Oikocredit’s breadth of experience (more than 90 years combined) and common experiences and objectives.

The technical assistance provided by Opportunity's EduFinance program to partner financial institutions focuses on the on-lending of Oikocredit’s capital support to the education sector. This capital is essential for scaling up EduFinance loan products and providing deeper impact for schools and communities in the target countries.

By providing Opportunity's signature EduFinance programing and increasing Oikocredit’s lending footprint, the collaboration builds on the proven success of combining tailored lending with training and support for financial institutions and schools.

Here's an interesting read: MicroFinance Institutions Network

Oikocredit faces challenges in managing loans due to the variety of foreign currencies used in local transactions. The dollar is the base currency for loans, but local currencies are often required, leading to complexity.

Beja Morren, Manager Financial Control & Accounting, notes that this complexity makes payments on behalf of these accounts very cumbersome. The need to use different local electronic banking systems doesn't enhance the banking landscape's visibility.

Oikocredit has faced criticism for its investments in Cambodia's microfinance sector, with allegations of inadequate due diligence since at least 2017.

Several human rights organizations, including LICADHO, Equitable Cambodia, and FIAN Germany, have filed a complaint against Oikocredit, accusing it of providing loans that led to forced land sales.

Oikocredit has responded by stating that it had not identified any forced land sales and that customer protection is its top priority.

The organizations behind the complaint have pointed to evidence of a debt crisis in Cambodia since at least 2017, which they claim continued despite Oikocredit's investments in microfinance institutions.

The allegations against Oikocredit highlight the complexities of microfinance and the need for careful due diligence to prevent harm to vulnerable communities.

Here are some of the key issues raised by the complaint:

Oikocredit faces challenges due to the use of different local currencies for loans in various projects.

The dollar is the base currency for loans, but local currencies are often required, leading to loans being issued in foreign currencies at a national level.

This creates complexities for Oikocredit, as it needs to use different local electronic banking systems for each project.

The lack of visibility in the banking landscape makes it difficult for Oikocredit to manage payments for these accounts.

As a result, Oikocredit experiences cumbersome payments on behalf of these accounts.

Oikocredit's financial management is a key aspect of its operations. They have a strong track record of financial sustainability, with a loan portfolio of over €1.5 billion.

Their financial management is guided by a clear set of principles, including a focus on social and environmental impact. This approach has enabled Oikocredit to maintain a high level of financial stability, with a credit rating of A- from rating agency Moody's.

Oikocredit's financial management is also characterized by a high level of transparency. They publish regular financial reports, including an annual report and a semi-annual report, which provide detailed information on their financial performance.

Their financial management team is experienced and skilled, with a deep understanding of the social finance sector. This expertise enables them to make informed decisions about investments and to manage risks effectively.

Oikocredit's financial management is also guided by a commitment to social and environmental responsibility. They have a strong focus on reducing their environmental impact and promoting social justice in the communities they work with.

Cobase provides Oikocredit with useful insight into different areas of their work.

By using Cobase, Oikocredit can quickly check the balances of their banks and accounts and easily determine which accounts need to be funded.

The platform allows Oikocredit to manage all payment preparation and processing in one place, eliminating the need to log in and out of various bank portals.

This offers substantial efficiency benefits to the daily work of those who prepare and approve payments.

The Cobase sFTP connector automatically uploads the bank statements into the accounting package and sends the payment files to Cobase.

Potential risks have been eliminated by the substitution of manual upload/download to automatic download/upload of statements and payment batches.

Cobase follows Oikocredit's developments when they decide to open extra bank accounts in new countries, seeking to integrate and adapt the local reporting and payment protocols.