Oikocredit is creating a simpler and more direct way for people and organisations to invest in the cooperative and to increase social impact.
New capital-raising model launched for cooperative members
Oikocredit's new capital-raising model will offer investors a single channel to invest directly in the international cooperative. This will be by means of non-voting equity instruments governed by Dutch law called participations. Despite the characteristics of the participations, the cooperative's members will continue to hold voting rights.
Changes effective from 1 March 2023
The new model came into effect as of 1 March 2023. As of this date, Oikocredit converted outstanding member shares into participations. Member voting rights and the relationship with the cooperative will be unaffected by this conversion.
Members of Oikocredit are now able to invest in participations as of 1 March 2023.
New model expected to unify Oikocredit's work and increase its impact
Participations will completely replace both the shares that Oikocredit issued only to cooperative members, and the other investment products that are derived from such member shares but issued by Oikocredit's support associations and Stichting Oikocredit International Share Foundation (OISF). Participations are materially similar in financial terms to the member shares previously issued by Oikocredit, and to the other investment products issued by Oikocredit's support associations and OISF.
With participations, Oikocredit will simplify and standardise its investment offer in its active countries. This will enable the cooperative to use more resources in partnerships and projects that benefit low-income communities, and in promoting sustainable development together with its global network of investors, members and partners.
More information about participations can be found in the prospectus, participation terms and articles of association as well as below in the table and FAQ section.
Comparison of key features of the shares and the participations
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Member shares (previous product) |
Participations (new product) |
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Type of investment |
A member share issued by Oikocredit available only to cooperative members. | Non-voting equity instrument issued by Oikocredit, called a participation, available to cooperative members and any other eligible individual or organisation. |
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Minimum opening investment |
€ 200/CHF 250/SEK 2000 (the nominal value of one member share). | € 200/CHF 250/SEK 2000 (the nominal value of one participation). |
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Issue price |
The issue price of a member share is the nominal value (€ 200 or the equivalent value in other currencies). Issuance at net asset value (NAV) below € 200 requires amendment of Oikocredit’s articles of association with approval of the general meeting of its members. | The issue price of a participation is the nominal value (€ 200 or the equivalent value in other currencies) or net asset value (NAV), whichever is lower. This allows Oikocredit to issue participations should the value of the participations drop, without needing to amend the articles. It has been made explicit in the participation terms how the NAV per participation in foreign currencies is calculated should the NAV fall below the nominal value. |
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Redemption price |
Nominal value (€ 200 or the equivalent value in other currencies) or net asset value, whichever is lower. This means that the redemption price cannot exceed € 200 (or the equivalent value in other currencies) but can be lower. | Same as for member shares. It has been made explicit in the participation terms how the net asset value per participation in foreign currencies is calculated should the net asset value fall below the nominal value. |
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Dividend |
As decided by Oikocredit’s members at the annual general meeting. Past dividend levels have included 2%, 1% and 0.5% (see recent dividend figures in the 5-year overview table in our annual report). There have also been years in which no dividend has been paid. | Same as for member shares. |
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Costs for investment administration |
Allowed in principle, but none are in place. | Allowed in principle, but none are in place. |
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Risks |
An investment in member shares carries financial risks typical for an investment in the equity of a company. These risks and others are described in the prospectus. An investment is fundamentally associated with considerable risks and can lead to the complete loss of the invested capital. Oikocredit seeks to protect the capital of the investors through careful business decisions and diligent provisioning for expected losses, although a residual risk can never be completely ruled out. Since Oikocredit began in 1975, no investor has lost any of their capital. However, past performance is not a guarantee of future results. |
The risk profile is the same as for member shares. The risks for investing in participations is described in a new prospectus. |
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Redemption |
Members can submit a redemption request by filling in a redemption form at any time to request their money back. Redemption requests are processed on a monthly basis. Redemptions are always at Oikocredit’s discretion. |
As is the case with member shares, members can submit a request for redemption. Redemptions are processed on a monthly basis and are always at the discretion of Oikocredit. In addition, Oikocredit can also decide to redeem in case a member no longer meets the eligibility requirements or holds less than one participation. |
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Liability |
Members’ liability is limited to the amount they have invested. This means an investment is subject to full loss, but members cannot be held liable for debts of the cooperative beyond the amount they have invested. | Same as for member shares. |
Frequently Asked Questions for cooperative members
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Why is Oikocredit transitioning to a new capital-raising model?
More questionsOikocredit wants to offer all investors a simpler and more direct investment. With participations, any eligible organisation or individual can invest directly in Oikocredit. Previously, only Oikocredit’s members could invest directly in the cooperative.
Allowing all eligible individuals and organisations to invest directly will unify and standardise Oikocredit’s capital-raising model across different countries. This is expected to free up more resources for loans, equity stakes, capacity building and community-focused projects that benefit Oikocredit's partners and low-income clients served. It will also allow Oikocredit and its support associations to focus more on activities promoting sustainable development, together with the cooperative’s network of investors, members and partners.
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What is the main difference between the new and old models?
More questionsOikocredit’s cooperative members previously invested directly through an investment in member shares. Under the new capital-raising model, members will continue to invest directly in Oikocredit by means of non-voting equity instruments governed by Dutch law called participations. Member voting rights and the relationship with the cooperative are unaffected by the introduction of participations.
Participations are materially similar in financial terms to the current member shares.
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What is the main difference between the member shares and the participations?
More questionsThe differences between participations and member shares are minimal.
There continue to be no costs for the administration of your investment. Furthermore, there is no change to the risk profile of your investment, dividend provisions, your opportunity to invest or redeem, or who you can contact if you have questions about your investment. Members continue to hold voting rights in the cooperative.
The main difference between participations and member shares in financial terms is that Oikocredit is allowed to issue participations at a value lower than the nominal value (EUR 200/CAD 200/CHF 250/GBP 150/SEK 2000/USD 200). This will only happen if the net asset value of participations fell below EUR 200 which is the nominal value in Oikocredit's benchmark currency. With member shares, issuance below EUR 200 was not possible without having to amend the articles of association.
Learn more about this change in the question “At which price will I be able to buy or sell participations under the new model?” and "What is the net asset value per participation and how is it determined?”.
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When will the new capital-raising model come into effect?
More questionsThe new capital-raising model came into effect for cooperative members on 1 March 2023 (see question "What will change for me?").
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What will change for members of Oikocredit?
More questionsWith effect from 1 March 2023, Oikocredit has converted outstanding member shares into participations. Any investments made by a member after 1 March 2023 will be in the form of participations. It is recommended that member representatives familiarise themselves with the prospectus, participation terms and articles of association.
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At which price will I be able to buy or sell participations under the new model?
More questionsIssue price
Each participation will be issued against the net asset value (NAV) per participation, or the applicable nominal value (EUR 200/CAD 200/CHF 250/GBP 150/SEK 2000/USD 200), whichever is lower. This means that if the NAV per participation is equal to or higher than EUR 200, which is the nominal value in Oikocredit’s benchmark currency, the issue price is EUR 200/CAD 200/CHF 250/GBP 150/SEK 2000/USD 200. If the NAV per participation is lower than EUR 200, the issue price is the lower NAV per participation expressed in EUR/CAD/CHF/GBP/SEK/USD. To learn more about the NAV and how it is calculated, see question “What is the net asset value per participation and how is it determined?”.
This is a change from the previous situation where member shares could only be issued at nominal value. It was previously not specified in Oikocredit’s articles of association what would happen if the NAV fell below the nominal value. In such a scenario, Oikocredit’s Managing Board would have had to suspend issuance (and redemption) altogether and amend the articles of association with the approval of the general meeting to allow issuance below nominal value. For members, this could have meant a longer period in which they are not able to redeem their investment.
With the new capital-raising model, issuance may continue below the nominal value upon resolution of the Managing Board. The existence of this possibility will allow the Managing Board to have a larger toolbox at its disposal to respond in difficult times to protect the cooperative and its investors.
Redemption price
Importantly, how the redemption price is set is unchanged compared to member shares. Oikocredit will redeem investors at the NAV per participation. If the NAV per participation is equal to or higher than the nominal value of EUR 200/CAD 200/CHF 250/GBP 150/SEK 2000/USD 200, then redemption will be at the nominal value of EUR 200/CAD 200/CHF 250/GBP 150/SEK 2000/USD 200. While Oikocredit has never redeemed members at a lower price than the nominal value in the past, it has always been possible to do so under the previous model, and members have always faced the risk of receiving back less money than they invested.
This change and how the issue and redemption price of a participation is calculated is explained in more detail in annex 1 to the participation terms (see 'New capital-raising model documents').
Examples
Scenario: NAV above nominal value Scenario: NAV below nominal value Issue price A Swedish member submitted an issue request for SEK 10,000. The net asset value of the Swedish krona participation was determined at SEK 2,120 and therefore the issue price was determined at SEK 2,000 per participation (the nominal value). Following Oikocredit’s positive decision on the issuance and redemption of participations, the member will receive 5 participations. A Swedish member submitted an issue request of SEK 10,000. The net asset value of the Swedish krona participation was determined at SEK 1,760, hence the issue price was determined at SEK 1,760 per participation. Following Oikocredit’s positive decision on the issuance and redemption of participations, the member will receive 5.68 participations. Redemption price A French member submitted a redemption request for EUR 750. This organisation holds 21.3 participations. The net asset value of the euro participation was determined at EUR 212, and hence the redemption price was determined at EUR 200 per participation (the nominal value). Following Oikocredit’s positive decision on the issuance and redemption of participations, Oikocredit will pay EUR 750 to the member, assuming no taxes must be withheld. The investment will be reduced by 3.75 participations and will be 17.55 participations. A French member submitted a redemption request for EUR 750. This organisation holds 21.3 participations. The net asset value of the euro participation was determined at EUR 176, and hence the redemption price was determined at EUR 176 per participation. Following Oikocredit’s positive decision on the issuance and redemption of shares, Oikocredit will pay EUR 750 to the member, assuming no taxes must be withheld. The investment will be reduced by 4.26 participations and will be 17.04 participations. -
What is the net asset value per participation and how will it be determined?
More questionsThe net asset value (NAV) describes the value of a participation as at the last calendar day of the month. The net asset value per participation is calculated in four steps:
- Determining the ‘total investor amount’ by multiplying the number of participations outstanding for each currency, by the nominal value and by the exchange rate against the euro (obtained from Bloomberg on the last calendar day of the month). This provides us with the total investor amount in euros.
- Determining the ‘net asset value (NAV)’ of Oikocredit by deducting the non-equity liabilities amount from the total assets amount. We establish this from Oikocredit’s balance sheet as at the last calendar day of each month.
- Determining the ‘net asset value (NAV) quotient’ by dividing the net asset value of Oikocredit (from step 2) by the total investor amount (from step 1). The NAV quotient will tell us how many cents are available for each euro in the total investor amount. If the quotient is higher than 1, it follows that the net asset value per participation is above the nominal value. If that is the case, issuance and redemption will take place at nominal value.
- Determining the exact net asset value of the participations issued in each currency by multiplying the NAV quotient with the nominal value of the participation.
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I have more questions. Who can I ask?
More questionsYou can contact the investor support team in the Netherlands via the email oi.support@oikocredit.org.
If you would like to speak with someone, email us at oi.support@oikocredit.org with your preferred time(s) and phone number, and we will do our best to accommodate your shared preferences.
Read our investment prospectus
Members of the Oikocredit cooperative invest in shares in Oikocredit. Read our prospectus, other relevant documentation and our articles of association to learn more about these investments.
This page was last updated on 1 March 2023.