Oikocredit Results 2006: Poverty Alleviation Needs Focus on Social Impact

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Feb 2007
Amersfoort, Netherlands, February, 27 2007 - As Oikocredit finalized its audited financial statements last week, all figures confirmed that 2006 was another year of exceptional growth. Far beyond the objectives of consolidation after the 2005 microfinance boom, Oikocredit answered the increasing demand for credit for development and the rising interest for socially responsible investments. The portfolio outstanding amounts now to 208 million euros when the member capital flirts with the 300 million Euros.

In the past five years, Oikocredit's portfolio has doubled. The growth strategy followed since 2001 has paid off to the benefit of its project partners and members. The outstanding 561 project partners received capital they could not find elsewhere in the form of loans, equity investments or other financial products, tailor made to their needs and capacity.

Results

The total development financing income increased by 24% to 15.8 million euros (2005: 12.7 million) while net income increased by 37% to 8.5 million

euros (2005: 6.2 million). These positive results show that Oikocredit can fulfill its mission while showing solid financial performance. Based on these results, the board will propose the usual 2% dividend to the members. The growing outreach of Oikocredit to the poor will not only provide its 27.000 investors with their usual modest dividend but also with the social return that motivated their investment.

10 million clients

Oikocredit is not only interested in growth. It wants to contribute to poverty alleviation and thus further measure the social impact and  performance of its clients. Financing more than 300 microfinance institutions and -via these institutions- indirectly reaching out to their 10 millions clients is one of the ways Oikocredit choose to achieve its mission. Focusing further on measuring impact will enable Oikocredit to assess its development strategy and capacity to contribute positively to the lives of people. 

Focus on less established institutions

Oikocredit witnesses daily the power of microfinance. However the fact that today most microfinance funds are financing the well established institutions has triggered Oikocredit to shift its focus. Managing Director Tor G. Gull: "Well-establshed microfinance institutions are flooded with money, they get offers from funds and institutions from allover the world, which may tempt them to take on more than they can absorb and in the long run even bring some of them into serious difficulties. Reason why we focus even more on the less established institutions. Therefore funds for technical assistance are much needed. For example, improved management, new technology and training of credit officers will contribute to the efficiency of microfinance to the benefit of the poor."

Beside microfinance, Oikocredit supports other types of organisations in developing countries such as Fair Trade producers, agriculture cooperatives, small and medium enterprises. Oikocredit's Financial Statements, to be published by the end of March and available at http://www.oikocredit.org, will give more insight on the achievements in 2006 of this unique cooperative guided towards poverty alleviation.



Source : PR NewsWire
 

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