The Oikocredit Value Chain - from Investor to Borrower

The Oikocredit Value Chain - from Investor to Borrower

December 21, 2011 at 6:00 PM - by Leah Gage - 0 comments

Oikocredit’s motto is “Investing in People.” But what does that mean – and how can investments funds from US investors reach entrepreneurs and workers in the poorest countries worldwide? Oikocredit USA staffer Leah Gage breaks it down.

The Oikocredit Value Chain

Part 1: The Investor

Being an investor in Oikocredit is more than just a passive contribution to global poverty alleviation. Sometimes, being an investor in Oikocredit requireswork – I can attest to that on behalf of the investors who are patient with our basic service features – paper-based statements, lack of online account access, and payment of interest and/or principal by check instead of electronic delivery. My job at Oikocredit USA for the last year has largely been client service; I’m the go-to-gal when it comes to questions, problems, and praise. Though we don’t have sophisticated systems, our investors can rest assured that their funds are invested in incredibly innovative and world-changing projects for the benefit of the less fortunate across the globe. So here’s to our investors, who are the very beginning of the Oikocredit value chain!

Volunteer investors from our Northwest Support Association in Seattle discuss expansion strategies

But the work of many investors doesn’t end with just a commitment of investment capital. Many are investor-volunteers who have helped to raise over half (60%!) of Oikocredit’s nearly $700 million portfolio. That is an incredible statistic, and a most certain attestation to the active commitment of Oikocredit investors our social mission. It’s a commitment to equality and compassion using the vehicle of finance. This throng of Oikocredit investor- volunteers compiles a long line of links to complete the first part of the Oikocredit value chain.

Part 2: Oikocredit!

International staff gathers at the Oikocredit International Annual Staff Meeting this fall

Oikocredit makes up the second section of links in the value chain. The funds from our investors are placed in our general development portfolio and are disbursed to partners in over 70 countries. We’ve got staff in the Netherlands and on the ground in developing countries with all sorts of expertise – they are charged with managing the portfolio, monitoring risk, developing the social performance policy, supporting institutional capacity building of partners, and working to ensure our loans (funded by investors) are paid back – which they have been for the last 36 years we’ve been in business. We have our investor relations offices in the US and Europe working to raise funds and educate local constituents on our work. It’s a dedicated, diverse and tight-knit crew of over 200 staff people around the world who make up the second section of links in the Oikocredit investment value chain.

Oikocredit USA interns and myself with Frank Rubio, Regional Manager in South America

Part 3: Our Partners

Our project partners are the third link. Who are they? They’re the 890 mostly locally-based organizations who are the direct recipients of Oikocredit’s funds. It’s difficult to pigeon-hole our project partners – they’re pretty diverse and they engage in lots of different kinds of activities. Our partners are microfinance institutions (MFIs), agricultural cooperatives, trade cooperatives, organizations that provide training and capacity building, among others.

Ikongo Rural Co-operative Savings and Credit Society in Kasese, Uganda, one of Oikocredit's partners

The value chain from investor to end-borrower would simply not work without this third stretch of links. Oikocredit believes that effective microfinance and sustainable economic development requires localized solutions. We pick our partners because of their respective commitments to reaching local people with particular needs by utilizing targeted approaches. These institutions turn our loans into financial products and services that assist nearly 30 million individuals today.

Part 4: The End-Borrower


A borrower of Adhikar Microfinance, Oikocredit's project partner in Orissa State, India providing sustainable and affordable loans for women. Adhikar focuses on the social as well as financial empowerment of its clients.

When Oikocredit talks about “investing in people,” end-borrowers are the people we mean –end-farmers, market vendors, trainees, etc – who are the final link in the chain. These individuals add value to their local communities and familes…and to Oikocredit’s investors. End-borrowers use their funds to generate more income, increase their cattle, and expand the acres of coffee plants or cocoa trees they own.

Last month I got a rare opportunity to shake hands with two of these individuals. Fatima Ali and Felicia Mensah are cocoa farmers and members of Kuapa Kokoo, a cocoa farming cooperative made up of 64,000 farmers in Ghana. To call these women impressive would be a gross understatement – they’re hard workers, successful farmers, leaders in their communities, exceptional women in their society, and young mothers to boot. Fatima is the youngest member of the National Executive Council, which governs the cooperative and devises strategies for growth and development.  Here’s a clip of Felicia and Fatima explaining to me what it would take for me to become a member of their cooperative…

Felicia explained to me the overarching idea of Kuapa Kokoo, which is ‘Nobua’: “if you help me, I also help you.” This reminded me of an email received from an investor who wrote to explain why he invests in Oikocredit. “It is not just a money thing,” he wrote, “but it is my way of linking myself with others who are sharing the vision of helping people develop a better life for themselves.”  I think these ideas are shared throughout Oikocredit’s value chain. That’s what gives my work value, and makes me a proud link in the Oikocredit investment value chain!

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