It's hard to imagine life without credit — we use it every day to buy homes, pay for education, and make ends meet. But in many parts of the world, credit isn't available at all. In those places, access to a small loan is often all that stands between a poor person and starting the small business that would provide them the income to break the cycle of poverty.

Most banks do not believe in investing in the businesses of the poor. That's why Oikocredit is so important.

For over 30 years, Oikocredit has been proving that entrepreneurs, cooperatives and other businesses in developing countries are credit—worthy partners. In fact, the demand for loans offered by Oikocredit is steadily increasing as the effectiveness of credit for development is recognized. Oikocredit loan recipients generate income, support their families, and often go on to create lasting improvements throughout their communities. Lenders like you not only earn financial returns, but can also trust that their money is being used to fight poverty, promote fair trade, and respect our planet's natural resources. When done with honesty and transparency, microcredit is a sustainable, win—win approach to changing the world.

So how does the process work?

Oikocredit Investment Process

Step 1. Oikocredit gathers funds from investors — people like you — in the developed world. These investors earn a return of 2% on an investment of almost any size, which may be invested for a term of their choosing — either 1, 3, or 5 years.

Step 2. Oikocredit combines these funds and provides capital to our network of 570 rigorously—selected microfinance partners in 70 countries. These partners are microfinance institutions, small and medium sized enterprises, and financial cooperatives.

Oikocredit focuses on groups rather than individuals. This guarantees that more people benefit from a loan. We aim to reach people at the grassroots of society and our group—funding approach is the most effective way of doing so.

Step 3. Our microfinance partners then divide up this larger loan into many small loans (typically $50 to $2500) and provides these loans to poor clients — 80% of whom are women — enabling them to start or expand their own microenterprise or small business.

In order to avoid the concern of having no collateral, clients are frequently organized in borrower's circles, where several borrowers together are responsible for the repayment of each loan. Oikocredit and our partners also work together to provide business support and services to these borrowers, helping to ensure the enterprises succeed.

Step 4. In 95% of cases, the entrepreneurial borrower succeeds in their microenterprise or small business. This ongoing income can stabilize and reshape the lives of the entrepreneur and their family, providing them income for basic needs such as clean water, food, and shelter, as well as education, medical treatment and social mobility.

Step 5. As clients repay their loans to the local microfinance partners, the partners return the capital to Oikocredit and the cycle continues. Investments in Oikocredit are therefore not tied to any one individual borrower, but enable investors in the developed world to trust that their funds are being invested where it matters most.

Oikocredit returns investor funds according to the initial Terms of Investment the investor selects (with 2%, 1%, or 0% interest, and for a term of 1, 3, or 5 years). Investors may choose to reinvest or withdraw funds.

Three decades of experience have brought convincing proof that loans enable poor people to earn their own income, decrease grant and aid dependency, and bring dignity to their lives. Meet the Borrowers.

Go here to invest.