Frequently asked questions

Our FAQs offer answers to some most common questions on the coronavirus.

This information was last updated on 26 April 2021.

  • How are Oikocredit’s operations affected by the coronavirus? How is Oikocredit managing the risks arising from the pandemic?

    Oikocredit is continuing its business activities. We continue delivering on our mission to support our partners, and the low-income people they serve, at a time when their need for support is even greater. In our 2020 Annual Report we share more details about how we managed the risks arising from the pandemic and what its effect was on our financial results. We continue to assess the potential impact on the value of our development financing portfolio going forward and keep our members and investors informed about the value of their investment in our news and quarterly updates.

    We closely monitor and respond to developments related to Covid-19. We have dedicated groups comprising Oikocredit Managing Board members and internal specialists who monitor:

    • the status of our investments in and loans to our partners in Africa, Asia and Latin America;
    • questions and concerns from our members and investors, as well as investment and redemption flows;
    • our term investment portfolio and other liquid funds; and
    • general developments related to the pandemic, including its impact on the welfare and effectiveness of our staff working across the world.

    Wherever applicable, our staff continue to work from home, in compliance with government measures. We also have contingency plans in place to deal with operational events.

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  • How is Oikocredit’s work with its partners affected by Covid-19?

    We continue to be in close contact with our 560-plus partner organisations to determine their evolving needs and ascertain how Oikocredit can best help address them, particularly in situations where partners face financial difficulty.

    During 2020, to ease the financial situation of 113 of our partners, we granted payment holidays (extended repayment periods) for outstanding loans representing 29% of our total outstanding credit portfolio at the time. While we have not categorised such partners as overdue in their repayments, we recognise this category as more ‘at risk’ than before the crisis. Most of these partners have now resumed their repayments according to schedule. See also: What effect is coronavirus having on Oikocredit’s performance? 

    In addition to granting payment holidays, we’ve stepped up our partner communications, using digital channels in place of in-person meetings, to ensure that we understand how partners are affected by the pandemic and can provide appropriate assistance.

    Central to these efforts have been our webinars and online encounters with partners sharing advice on: business continuity and cash flow; ensuring health and safety of staff and clients; understanding impacts on clients; stress testing, risk and scenario planning; and learning from sector leaders. See also: What role does capacity building play in Oikocredit’s response to the pandemic?

    Our partners have responded positively to the support we provide, especially the smaller institutions, and this support is ongoing. The external threats have brought our partners and ourselves closer together.

    Following a period of focusing only on our existing partners, during which we suspended lending to and investing in new partners, we selectively opened for new partners in Q3 2020. We continue to apply a cautious approach in monitoring and engaging with partners. We notice in general that there is lower demand for financing due to subdued economic activity in most countries, but we see signs of recovery from the pandemic and its economic impacts, albeit slow in many cases.

    In addition to our own efforts, Oikocredit continues to align with other impact investors in coordinating our responses to Covid-19 challenges jointly with each other in support of our partners. We have so far committed to two joint initiatives:

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  • How are Oikocredit’s partners and their clients affected by the coronavirus?

    For our partners, many of their clients have been unable to operate as usual. Covid-19 and in-country restrictions on movement and social interaction have reduced economic activity, especially in microfinance. Some micro enterprises have been unable to function, while others have seen their income reduce. This has made it challenging for many partners to collect repayments from clients. At Oikocredit we have adopted special processes to assess, monitor and support our partners more closely, just as our partners have done with their clients. See also: How is Oikocredit’s work with its partners affected by Covid-19?

    When a partner asks us for flexibility in servicing our loans, we assess whether this helps the partner to do the same with their clients. And the same goes for refinancing, because we continue not only to support our partners with advice, but also to give them additional funds to manage their businesses. In turn, we expect them to continue offering their services to their clients as much as they can, to limit the effects of the crisis as much as possible.

    While many partners have begun to resume more normal activities since mid-2020, we are closely monitoring the evolving situation across the markets in which we work as new waves of the pandemic are affecting different regions. We have seen differences between sectors and countries in terms of the severity and effects of the pandemic, its timing and duration, and measures taken by governments.

    Overall we see less impact in agriculture and in renewable energy than in financial inclusion. This could change, but so far agriculture and energy have often been designated by governments as priority sectors, whereas financial inclusion is exposed to general economic activity that is directly affected by the lockdowns. As measures taken by governments continue to develop, we will keep monitoring the situation closely.

    It is likely that the low-income communities our partners work with will continue to be greatly affected by the pandemic and associated consequences. Accordingly, we believe that our partners and the people they serve will need extra support. We also believe our support has the potential to assist their recovery and longer-term resilience.

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  • What role does capacity building play in Oikocredit’s response to the pandemic?

    As part of our proactive response to the coronavirus crisis, Oikocredit has offered capacity building support to its partners. Initiatives have included a webinar series on crisis management, virtual peer exchanges to allow partners to share crisis best practices with one another, and dedicated webpages of resources for partners.

    We have created a coronavirus solidarity fund and used this to help our partners provide extra support to their clients. The Oikocredit International Support Foundation created the fund with an initial sum of € 25,000, which has been augmented with contributions from Oikocredit Stiftung Deutschland and Oikocredit Nederland. By the end of 2020 the fund had distributed € 70,287 to 38 partners in 19 countries.

    We have prioritised for financial assistance more vulnerable partners and clients that have had to comply with government lockdown restrictions on mobility and social gatherings, and with new regulations on personal protection, sanitation and hygiene. The fund has especially helped partners’ micro and small enterprise clients in the informal sector and in low-income communities with awareness training and the costs of sanitation materials and protective gear, enabling them to keep operating. We have broadened the fund’s objectives to include emergency assistance to at-risk partners and their clients and members in the agriculture sector. In late-2020 we further broadened the fund’s objectives to help partners adjust their operations to continue business in innovative ways.

    We have also re-engineered our ongoing capacity building programmes to run without in-person meetings.

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  • How have Oikocredit’s members and investors been affected by the pandemic?

    Our members and investors have shown great commitment to Oikocredit, and the vast majority have stayed loyal. A small number of redemptions – fewer than we expected at the start of the crisis – and reduced inflow have led to a small decrease in member capital in 2020, but our investment base has remained stable. See also: What effect is coronavirus having on Oikocredit’s performance?

    Regular dialogue about inflow markets with the Oikocredit support associations has helped maintain our links to investors and kept them informed about what Oikocredit is doing to weather this storm. Since Q1 2020 we’ve reported to investors on our financial performance (unaudited) on a quarterly basis, including on net asset value per share, and more broadly on the effects of the pandemic on our organisation and our partners.

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  • How are Oikocredit’s staff affected by the coronavirus?

    The health and safety of our employees remain a top priority for us. As a global organisation, we adhere to the public health guidelines issued by the authorities in all the countries where we work.

    Wherever applicable, our staff follow advice to work from home and restrict travel. As most of our employees were already able to work from home, we have good infrastructure in place to allow our staff to continue their work remotely using digital tools.

    Our staff have to work differently, for example in monitoring our partners and portfolio and in performing due diligence for new financing, because the Covid-19 pandemic is not a business-as-usual environment. We’ve been supporting our staff in changing the way they work, and we’ve been impressed by how our staff and our partners have been able to adapt in a short time span.

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  • What effect is the coronavirus having on Oikocredit’s performance?

    Despite our best efforts, Oikocredit’s financial performance could not entirely escape the consequences of the coronavirus and ensuing economic downturn in 2020, but it has shown resilience.

    Oikocredit made a net loss of € 22.2 million in 2020 compared with the net positive result of € 14.3 million in 2019. This outcome was in line with our expectations and earlier communications with members and investors and reflects our decision when the coronavirus first struck to protect our capital and maintain high levels of liquidity.

    For risk management reasons, we tempered the growth in our development financing portfolio of loans and investments. The total outstanding portfolio of loans and equity investments decreased by 20.6% to € 845.1 million, mainly as a result of our decision early in the crisis to focus only on existing partners, to be prudent when partners asked for refinancing and to not finance new partners. In the second half of 2020 we cautiously approved more loans as refinancing for current partners as well as lending to a small number of new partners.

    Overall, the quality of our development financing portfolio at the end of 2020 had deteriorated a little, with PAR 90 (the percentage of the credit portfolio with payments at least 90 days overdue) rising from 5.4% at end-2019 to 5.8%. Regionally, the portfolio has been less impacted in Africa than in Asia and in Latin America and the Caribbean.

    We have increased provisions for partners’ postponed repayments, but to a declining extent. We have continued to assess risks that particularly affect partners with whom we have agreed payment holidays, such partners tending to be directly affected by Covid-19 and by in-country restrictions on business activity.

    Member capital declined slightly in 2020 by 2.3% to € 1,104.1 million. Net asset value per share reduced over the year from € 214.41 to € 210.50, because of the decrease in income and the relatively stable number of shares outstanding.  

    We have been able to maintain a stable investment base despite the contraction in our portfolio and interest income because of fewer redemption requests from investors than expected. Regular dialogue about inflow markets with the Oikocredit support associations has helped maintain our links to investors and has kept them informed about what Oikocredit is doing to weather this storm.

    More details are available in our 2020 Annual Report.

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  • How has Covid-19 affected Oikocredit’s term investments and other liquid assets?

    Oikocredit’s treasury specialists monitor the assets we keep aside for liquidity management purposes. At the end of 2019, we had a generous liquidity buffer of 19.6% of total assets, held in cash or term investments (bonds), which during 2020 we allowed to grow as a prudent response to the crisis and in case more investors requested redemptions. The term investment portfolio comprises investment-grade liquid bonds traded on public markets. Due to being of higher quality, these types of bonds are less vulnerable to fluctuations in the financial markets. A significant part of the term investments portfolio is invested in ‘green bonds’, selected to support climate-related or environmental projects.  

    We have also seen additional volatility in foreign exchange rates. While most of the portfolio is hedged, we saw some negative effects due to unhedged positions and timing differences in the portfolio in 2020. 

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  • How do you expect the coronavirus will affect Oikocredit going forward?

    By the close of 2020, many Oikocredit partners’ payment deferral periods had ended, and many had resumed scheduled repayments, although several needed further special arrangements. As a consequence of Covid-19, our cooperative made a loss for the year overall and saw some erosion of reserve levels. The unpredictability of the coronavirus and its effects on our partners and the wider economy in our focus countries makes it difficult to forecast what lies ahead. Even when we re-enter positive territory, recovery from the pandemic and its economic impacts will be slow.

    There may be a need to respond to further challenges affecting our partners and markets. But we will also be ready to take opportunities that occur to fund new and existing partners and to further Oikocredit’s mission.

    We have started work on our new strategy for 2022-26 and with key stakeholders are jointly exploring our long-term vision, purpose, theory of change and strategic choices. We are confident that preparing for a purpose-driven strategy now will help us during the recovery and allow us to support the transition to a more equitable, just and sustainable future for the people we serve.


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