Oikocredit reports positive results and partner satisfaction
Amersfoort, the Netherlands – Social impact investor and worldwide cooperative Oikocredit today published its annual results for 2019. The cooperative has made good headway in streamlining its business model, maintained investor confidence and received positive feedback from the organisations it finances.
Result highlights
- Net consolidated result: € 14.3 million (2018: € 1.3 million)
- Total consolidated assets: € 1,310.4 million (2018: € 1,292.9 million)
- Development financing portfolio: € 1,064.6 million (2018: €1,046.6 million)
- 75 current and potential partners benefiting from a capacity building spend of € 0.7 million (2018: € 0.9 million).
- Total funds available for investing: € 1,271.2 million (2018: €1,228.2 million)
- 59,000 individual and institutional investors (2018: 57,000)
- Proposed 1% dividend (as in 2018)
Improved financial performance
Oikocredit’s financial performance strengthened in 2019, with net income of € 14.3 million (up from € 1.3 million in 2018). Reduced operating costs, improved margins on new loans and the sale of three equity investments contributed to improving the result. Total consolidated assets rose to € 1,310.4 million (from € 1,292.9 million). Oikocredit’s Managing Board, with support from the Supervisory Board, will propose the declaration of a 1% dividend for 2019 to the cooperative’s members at the annual general meeting in June 2020.
Steady growth in development financing
Oikocredit aims to improve the lives of low-income people by financing partner organisations working mainly in financial inclusion (including microfinance), agriculture and renewable energy. By end-2019 the organisation had grown its development financing portfolio to € 1,064.6 million (from € 1,046.6 million in 2018) and was working with 674 partners in 65 countries.
Financing for partners in the financial inclusion segment increased to € 826.3 million (from € 796.2 million in 2018). Agriculture grew to € 172.3 million (from € 168.8 million). Renewable energy rose to € 52.1 million (from € 48.4 million) with more emphasis on smaller-scale projects with direct social benefits for communities. Funding for other sectors reduced to € 17.2 million (from € 32.2 million) in line with Oikocredit’s updated strategy, which focuses on financial inclusion, agriculture and renewable energy. The total portfolio comprises both loans (86.0% of development financing, compared to 84.5% in 2018) and equity investments (the latter declined slightly, to 14.0%; 15.5% in 2018).
Portfolio quality remained generally good, but in agriculture portfolio at risk (PAR 90: the percentage of the credit portfolio with payments more than 90 days overdue) remained high. While Oikocredit slowed growth in financing in several agriculture subsectors to manage this risk, it continues to support agricultural partners because of the substantial benefits for smallholder farmers and low-income rural populations.
Partners value social focus
Social performance management is central to Oikocredit’s development financing model, including diligent partner pre-assessment and environmental, social and governance monitoring. Oikocredit’s fifth partner satisfaction survey found that partners value the cooperative’s social focus, customer service, staff expertise and long-term commitment.
Oikocredit provides capacity building to help partners build resilience and generate social impact. In 2019 the organisation spent € 0.7 million (2018: € 0.9 million) on capacity building support for 75 current and potential partners in 24 countries.
Investor numbers grow
The number of individuals and institutions investing in Oikocredit directly or via Oikocredit support associations and the Oikocredit International Share Foundation increased by about 2,000 in 2019 to 59,000 (2018 increase: 1,000). The cooperative grew its member capital by 4.4% to € 1,129.8 million (€ 1,082.5 million in 2018) and sustained its net inflow of funding from members and banking partners (€ 38.4 million; down from € 77.9 million in 2018). With enough funding from members for its development finance requirements, Oikocredit reduced the inflow from banks.
Fitter for the future
In 2019 Oikocredit continued to implement its 2018-2022 strategy and completed its restructuring. Thos Gieskes, Managing Director at Oikocredit, said: “With a renewed focus and a more agile operating model, we are now better able to serve our partners, members and investors with enhanced resilience and confidence. We are very pleased that we have welcomed 2,000 new investors and that our recent survey shows how much partners value our services.
“In 2020 we will continue to improve how we work and look forward to continuing to serve both those who entrust us with their funds and the low-income people we support to help improve their quality of life.”
More information will be available in the Oikocredit 2019 Annual Report published at the beginning of April 2020
Monitoring the current situation
As Oikocredit continues its work in 2020, it is closely monitoring the situation of the novel coronavirus and assessing the potential effects on Oikocredit’s business activities on a daily basis. The cooperative remains operational and adheres to the public health guidelines issued by the authorities in the countries where it works, keeping the health and safety of its staff a top priority. Contingency plans are in place to deal with major operational events, should they occur. Oikocredit also continues to monitor the situation with partners and supports them where possible. Members and investors will receive regular updates via Oikocredit’s website (www.oikocredit.coop).
Thos Gieskes, Managing Director of Oikocredit, says: “As has been the case over Oikocredit’s 45-year history, our outlook and the support we offer our partners are long-term, and social impact and financial sustainability remains our priority. With our long track record in emerging markets and our local presence we’re confident we’ll be able to continue our work in these times of uncertainty.”
About Oikocredit
Social impact investor and worldwide cooperative Oikocredit has over 40 years’ experience funding organisations active in financial inclusion, agriculture and renewable energy. Oikocredit’s loans, equity investments and capacity building aim to enable people on low incomes in Africa, Asia and Latin America to sustainably improve their living standards. For more information: www.oikocredit.coop.
Note for editors:
For more information, please contact Ulrike Haug, Communications Manager, Oikocredit International: telephone: +31 6 25 65 53 75 or email: uhaug@oikocredit.org
