A break from stock talk this month, after all it’s the Christmas season, and thoughts turn to helping the less advantaged.
By now I’m sure just about everyone has heard of KIVA (www.kiva.org), the wildly successful organization that facilitates small loans to needy family businesses and entrepreneurs throughout the developing world.
Individual KIVA lenders do not receive any interest on their loans. Rather, we enter into these arrangements solely for the satisfaction of having given someone a boost in a business that strikes a chord with us. The internet has made this quick, easy and interactive.
Today there are scores of organizations involved in microlending. One of the very first on the scene, and still going strong after 35 years, is Netherlands-based Oikocredit (www.oikocredit.org).
Oikocredit was founded in 1975 and now has 35 regional partners around the world, including Oikocredit BC. They are a financial cooperative, composed of investors who are willing to invest their money in loans with affordable, market-related interest rates to people who have little or no collateral.
Their goal is to reach people at the grassroots level of society. When considering a project for credit assistance they use the following criteria:
- Creates jobs and incomes for groups of disadvantaged people.
- Favours projects where women are influential in management and/or implementation.
- Takes into account the environmental impact of projects and animal welfare.
- Is financially sustainable and has good management strategies.
- Can meet requirements for any government approval.
Active in 70 countries
760 project partners
85% women’s projects
Reaches over 17 million households
Repayment rate over 99%
Each $1,000 invested creates 5 jobs
Investors receive a 2% dividend
RRSP option available
35-year track record
Fair trade and ethical investments
Oikocredit supports over 50 fair trade organizations with investments amounting to 15.9 million Euros – 59% of which is devoted to cocoa, coffee and tea farmers. Here in British Columbia, investors have contributed over $3.5 million, up from $2.3 million at the end of 2009. They have welcomed 59 new investors in 2010 so far, making 300 in total, and the average amount invested was over $13,000. The minimum investment accepted is only $250.
Oikocredit is well aware that social goals cannot be taken for granted. Cases of over-indebtedness, unethical collection practices and poor transparency have called for a renewed emphasis on social performance in the microfinance sector.
The Oikocredit website includes a detailed Social Performance Report that details their initiatives in making sure that the € 394 million of loans and investments Oikocredit manages make a genuine difference.