‘Impact investing’ for sustainable growth

‘Impact investing’ for sustainable growth

February 15, 2017 - by Gaël Marteau - 0 comments

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When visiting two of Oikocredit’s microfinance partners in Luzon, Philippines, you soon get to see for yourself that microfinance is not only about money.

Both of Oikocredit’s partner organizations in this region – ASKI and CARD – were established in the mid-Eighties by inspired social entrepreneurs with a shared vision and belief: disadvantaged communities do not inherently lack the capacity to thrive. They need service, and that service ought to be excellent.

For them, “Excellent” means in this context: relevant, sustained, ambitious, fair, loyal, evolving and holistic. Alongside their clients, Oikocredit’s partners have made the journey from micocredit to SME lending, from only providing loans to granting access to markets, from finance to education, and from business support to health and environmental care.

As organizations intended to support human and economic growth, over time they have developed into groups with more than ten different entities, all still controlled by their respective ‘mother’ NGO. There seems to be only one limit to their potential for expansion: there has to be proven client needs – either already expressed or anticipated – in line with the institution’s broader vision and mission.

For Oikocredit, as a long-term investor, such a drive for community development and individual achievement amongst our local partners and their clients is another invitation to deliver more than just funding.  Indeed, the Philippines partners piloted two of Oikocredit’s key capacity building programmes – client outcome and disaster risk reduction management – during the last few years.

Client outcome is about measuring impact at end client level through enhanced and sustained utilization of the Progress out of Poverty Index, a proven microfinance industry tool designed by the Grameen Foundation. Oikocredit promotes its implementation and offers specific technical assistance to advanced partners so that they can also use the PPI as a dynamic impact assessment tool. ASKI is one of the beneficiaries of the programme in the Philippines and its already interesting findings are encouraging high expectations for even more useful PPI data in the near future.

Disaster risk reduction is about repairing and preparing in order to limit the impact of natural hazards like typhoons as much as possible. The Philippines is one of the most natural disaster prone countries in the world and our Oikocredit colleagues in the country have been proactively helping their local partners since 2014, with a view to reducing disruption in their operations and making it harder for poverty to take hold again when disaster strikes.

You really get to understand the importance of tracking positive change in living conditions while reducing environmental risks after one week of field visits with Oikocredit and some of its partners in the Philippines. I like to think we can truly call this work ‘impact investing’.


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