Introducing Oikocredit’s new community-focused approach: learning from partners

At our Extraordinary General Meeting on 2 December we presented members with an update on the new strategy, which will include, as an innovative element, a community-focused approach to social investing. We recently interviewed Nicolas Viedma (Senior Investment Officer Brazil), José Humberto Ulloa (Senior Investment Officer Central America and the Caribbean) and Eduard Walkers (Regional Director Latin America and the Caribbean), about the new approach and what this will mean for Oikocredit.

What has triggered Oikocredit’s move to a community-focused approach?

Nicolas: “The new emphasis on communities is intended to increase innovation in Oikocredit’s work and build on our longstanding objective of acting as a catalyst in the social investing sector. Adopting more of a community focus responds to the main need we see among low-income people: for greater resilience. Resilience is best strengthened at the community level.”

Eduard: “While microfinance and other forms of individual lending are beneficial, the issues around poverty are complex. Interlinked challenges at community level – related to housing, education, health or public infrastructure – can hold back individuals and weaken collective resilience. Lack of access to education, for example, is both an individual and a collective problem if there is no local school.”

José Humberto: “Our new more holistic approach aims to strengthen our partnerships and boost partners’ impact on communities. Many Oikocredit partners already focus on community needs to help serve their clients. They recognise that credit is just one of their clients’ or members’ needs, and that community-level challenges change over time, requiring agile and innovative responses. Climate change, for example, now inflicts disasters on low-income people in Central America every year, so our microfinance partners in the region go beyond loans and provide disaster relief as well.”

How is Oikocredit implementing the new approach?

Eduard: “We are still at a relatively early stage. Currently we are identifying partners whose community-focused approach we can learn from, and then observing and asking questions. We are looking at community needs in sectors such as education, health, housing, and water and sanitation, alongside existing partners already active in these areas. We use partners’ dialogue with the communities they work with to better understand what is needed locally and how we can harness external support for projects that increase community resilience.”

José Humberto: “The idea is to develop initiatives, in addition to our regular work, in which Oikocredit will fulfil the role of financing partner and bring in technical and social partners with complementary capacities such as by providing grant funding, technical assistance and infrastructure components. We need to determine what kinds of alliances will work best to drive the development of community-level solutions. So a great deal of learning is happening at present, and we will then see which other mission-aligned organisations we can bring to the table to add value to the solutions our partners are developing.”

Can you give a specific example of where this work is well under way?

José Humberto: “In El Salvador, for example, we are working with a longstanding partner organisation that provides a range of financial products for low-income households to acquire and improve their housing. Another partner in El Salvador makes loans to local municipalities to improve public spaces, parks, markets and other community infrastructure. We are in conversations with both partners to learn how they apply a community-focused approach and to discuss how we can replicate this together for other partners.”

Eduard: “Another example that our African colleagues have been working on is the US$ 100 million partnership that Oikocredit and Opportunity International have recently announced to support education in low-income communities in Ghana, Kenya, Nigeria, Senegal and Uganda. Our support for financial institutions serving vulnerable communities will include capital for schools, including improvement loans for school buildings and classrooms, and loans for students’ fees. Opportunity International will provide capacity building for the financial institutions and for the schools.”

How well is Oikocredit positioned to develop this community-focused approach?

Nicholas: “We are very well placed. Many Oikocredit partners are already working along these lines. And we have a distinct ability as an organisation to listen to and learn from partners that work collaboratively with the communities they serve, and then to draw on our international network to bring multiple stakeholders together. Patiently building on our partners’ experience is one of our strengths.”

Does the community approach also apply to Oikocredit’s members and investors, and between our partners?

Eduard: “Yes. We traditionally used to think that a community means your neighbours, the people who live around you. But today we can have a community around the world. Oikocredit’s members, investors and partners, for example, are a community. And we are also part of a community of social investors who want to collaborate to deliver value for the world’s low-income people.”