Oikocredit ambitious to achieve more

Oikocredit came through 2023 in good shape, successfully implementing two major transitions: our first full year’s execution of the 2022-2026 community-focused strategy and the replacement of shares with participations as the new investment product in most countries where we raise capital.  

The cooperative achieved growth in its development financing portfolio of credit and equity; generated a small positive net financial result; increased the number of financial inclusion clients, women, smallholder farmers and rural communities reached through partnerships; supported the provision of clean renewable energy to more households; built its community-focused portfolio; and supported partners in improving their environmental, social and governance (ESG) performance.  

External global and regional factors such as war, climate change, natural disasters, socioeconomic injustice, political turmoil, increasing extremes of poverty and wealth, and the onset of high inflation and high interest rates made the year challenging. 

Investing for social impact: our development financing portfolio  

Oikocredit’s credit and equity portfolio grew to € 1,084.7 million in 2023 (from € 1,007.2 million in 2022). Financial inclusion, the cooperative’s largest focus sector, increased to € 833.4 (2022: € 767.9 million), agriculture to € 185.8 million (2022: € 175.7 million) and renewable energy to € 58.6 million (2022: € 56.0 million). The new community-focused, resilience-building portfolio (investments in education, housing, water and sanitation, and infrastructure) reached € 57.3 million (2022: € 10.7 million).  

Total loans and equity grew in Africa to € 225.7 million (2022: € 189.2 million), in Asia to € 308.9 million (2022: € 289.5 million), and in Latin America and the Caribbean to € 507.3 million (2022: € 483.4 million). Total lending was € 935.1 million (excluding loan loss provisions) and total equity € 149.6 million (excluding impairments), up from € 862.4 million and € 144.8 million respectively in 2022.  

Oikocredit’s PAR 90 ratio, representing the percentage of outstanding loans with payments more than 90 days overdue, rose to 5.8% (2022: 3.8%). PAR 90 was particularly high in agriculture, where there are usually issues beyond partners’ control, such as climate change effects and changing international regulations that disadvantage commodity exports. We intensified monitoring and support for affected partners. 

Social performance and capacity building 

The cooperative’s strong commitment to social performance management places clients’ and communities’ needs at the centre of its investing and partnership activities. In 2023 we revised the agriculture ESG scorecard, held partner webinars on client protection, undertook our third annual Client Self-Perception Survey and published our annual Impact Report with data and case studies illustrating our social performance. 

Oikocredit’s new capacity building strategy prioritises impact in vulnerable communities (rural, farmers, women and youth), building links between partners and strengthening local business development service ecosystems.We spent € 1.0 million on 40 capacity building initiatives for 85 current and prospective partners this year (2022: € 0.6 million, 30 initiatives, 67 current/prospective partners). Donors provided € 0.8 million of our capacity building funds, which we focused mainly on agriculture, financial inclusion and work in Africa, often in support of solutions-focused environmental action. 

Members, investors and capital raising 

Some member organisations left the cooperative during 2023, and some non-member investors redeemed their investments, continuing the previous year’s trends. Departures reduced total member numbers to 490, although we also welcomed three new members. Investor numbers fell to just under 48,200 (including more than 4,700 organisations).  

Net inflow of member and investor capital was, as anticipated as we changed to our new capital-raising model, negative € 109.9 million (2022: negative € 18.3 million). Total member and investor capital reduced to € 1,000.8 million (2022: € 1,110.7 million). We arranged back-up funding to finance our activities during the current period. Net asset value (NAV) per participation rose due to our result and changes in accounting method to € 214.03 (2022: € 211.79 based on the new calculation method). 

Our organisation 

Oikocredit has achieved a valuable degree of internal stability, with the composition of the Supervisory Board, Managing Board and Executive Committee unchanged in 2023, and staff turnover reducing. The Members’ Council, the third of the cooperative’s governance bodies, welcomed new members replacing those whose term had ended. Our team of skilful, loyal and committed people, and our organisational agility and stamina, are sources of strength. 

Looking to the future 

While mindful of the external environment, we remain ambitious to achieve our strategic objectives, both quantitatively and qualitatively. The continued implementation of Oikocredit’s capital-raising model, increasing member and investor capital through amplified outreach and marketing, and more improvements to investor services will be key priorities in 2024. We also look forward to growing the development financing portfolio and protecting portfolio quality by continuing to closely support our loyal partners, and to undertaking more global learning for transformation and advocacy activities with our support associations.     

Internally our focus continues to be on digitalisation and automation to enhance services to members, investors and partners. We will give more attention to our business model’s long-term sustainability and our organisational culture, and make additional efforts to manage our environmental footprint.  

Mirjam ‘t Lam, Oikocredit’s Managing Director, said: “Oikocredit performed well in 2023, taking on more partners, growing our credit and equity portfolio, increasing the number of capacity building engagements, and enlarging our social impact to reach more women and rural communities and expand our support for renewable energy. The need for sustainable impact and investment in lives, livelihoods and communities in emerging economies is immense and growing. We have the strategy and capabilities to continue advancing social impact investing and supporting people with low incomes in building resilience.” 

More information is available in the Oikocredit 2023 Annual Report at www.oikocredit.coop/annual-report. 

About Oikocredit 

Social impact investor and worldwide cooperative Oikocredit has nearly five decades of 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 improve their living standards sustainably.  

Oikocredit finances more than 500 partners, with total outstanding capital of € 1,084.7 million (at December 2023). For more information, visit www.oikocredit.coop. 

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Note for editors 

For more information, please contact communication@oikocredit.org or +31 33 422 4040.