Oikocredit revises dividend proposal

The proposal will be made to the cooperative’s members at the annual general meeting (AGM) in June 2020, which will take place in Amersfoort, the Netherlands with members participating through web based conferencing and with electronic voting. The members have the final decision on the dividend.

The decision to revise the proposal was made by Oikocredit’s Managing Board and approved by the Supervisory Board.

Oikocredit announced a dividend proposal of 1% on 19 March, when the cooperative published its financial results showing improved performance for 2019. The development of the coronavirus crisis has since dramatically changed the global context in which Oikocredit operates, invalidating many of the assumptions used to make the 1% proposal.

The full effects of the pandemic on Oikocredit’s business and financial position are not yet clear, but the cooperative no longer expects to reach its growth and financial return targets for 2020.

Given the ongoing nature of the coronavirus crisis and the uncertainty it continues to create, Oikocredit’s Managing Board believes paying no dividend to members for 2019 would be in the cooperative’s best interests, as it would:

• Allow Oikocredit to add € 11 million that would otherwise have been distributed as dividends to its general reserves, which would help the cooperative weather adverse economic developments should these occur
• Help Oikocredit ensure the continuity of the cooperative and the protection of its members’ capital as uncertainty caused by the pandemic continues
• Allow Oikocredit to be flexible in responding to the needs of the partners it finances, which in turn support low-income people hardest hit by the crisis

Oikocredit continues to actively monitor local and national developments related to the pandemic. The cooperative is working closely with its partners in Africa, Asia and Latin America to determine their evolving needs and ascertain how Oikocredit can best help address them, particularly in situations where partners face financial difficulty.

The cooperative is also working with like-minded organisations including other social impact investors to align, cooperate and strengthen the response of the impact investing sector to the challenges created by the coronavirus.

In addition, Oikocredit is offering capacity building support to its partners. Initiatives so far include a webinar series on crisis management during the pandemic; virtual networking opportunities to allow partners to share crisis best practices; and the creation of a coronavirus solidarity fund to help microfinance partners provide extra support to their clients.

Thos Gieskes, Managing Director of Oikocredit, said: “Revising our dividend proposal is part of Oikocredit’s proactive response to the unprecedented situation the coronavirus has created for all of us.

“Given the increased economic uncertainty our partners are facing, and therefore Oikocredit is also facing, we believe it prudent to strengthen our reserves and be as prepared as possible for any adverse developments.

“With a strong 2019 behind us, and with the firm backing we continue to receive from our investors, I’m confident Oikocredit will keep delivering on its mission through this troubled period. And that continuity is paramount, especially at a time when our partners and the low-income people they serve need our support most.”

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