Behind the Impact Report 2020 [interview]
Behind the Impact Report 2020 [interview]
Kawien Ziedses des Plantes, Oikocredit’s Global Social Performance Specialist
We interviewed Kawien Ziedses des Plantes, Oikocredit’s Global Social Performance Specialist, to find out what’s behind the recently published Impact Report 2020. After 45 years, we still see Oikocredit’s sharp focus on end-clients and its determined drive for continuous improvement.
Why does Oikocredit publish an annual impact report?
The primary reason to publish the report is to check that we are achieving social impact, that we are making a difference in the lives of people with low-incomes that we support. The report is a moment in time showing what has happened in terms of impact, how many people have we been able to reach through our partners, and to describe the actions which Oikocredit has taken.
It’s about accountability, are we doing what we say we do? It’s also about improvement, can we improve on what we are doing? And it’s about transparency, showing the detail behind the numbers. In the end it is of course about the people who should benefit, who are they and how are they benefiting?
How does Oikocredit bring about and measure its social impact?
The first thing that Oikocredit as a cooperative wants to answer is: what is our mission? In 1975 our members established Oikocredit for “further development of the poor areas of the world” and to do this through providing credit. Oikocredit has since translated this into a strategy of improving the opportunities for low-income people and communities in our focus countries. Clearly Oikocredit can’t establish offices everywhere, so we work through carefully selected partner organisations which we invest in.
We work with partners that share our values and goals, and we already evaluate this when we screen our partners on environmental, social and governance (ESG) criteria. Here we are not only looking at who they reach, but how they work, for example in providing extra services to their borrowers. So, it’s about selecting the right partners and supporting them to deliver the social impact. That’s why the report focuses on the work of our partners.
People may say: why don’t you just measure improvement in incomes?
Yes, it’s a fair question to ask, and we have investigated this. The challenge is attributing household income change to a single intervention and it’s very costly research to implement. So, we rely on the social impact research that’s already been done. Social impact research tells us how we can achieve the impact we seek. This also means keeping tabs on what is going on in the research environment to better inform our processes.
Metrics in the report often put an emphasis on women, for example in reporting on the percentage of women clients served by our partners. This is a good example of social impact research. This shows that if you invest in a woman she will tend to share the income that she achieves across a wider spread of social impact, across the whole household. Research shows that this “social leverage” is not typically achieved when you invest in a man. That is one aspect, and the other is the empowerment of women.
In many societies, women often do not have an equal status to men, and so you will see microfinance organisations focusing on loans to women to give them a voice and an opportunity. So, by targeting women, especially in rural areas, we are targeting a proxy for the income improvements that we want to see, and this approach is backed-up by the research findings.
How important are the Sustainable Development Goals (SDGs) to Oikocredit’s work?
As a UN initiative, the SDGs have had huge value in bringing a high level of awareness to just about every corporation, fund and government in the world. This has brought about a surge of attention to what impact investors like Oikocredit are doing. It’s been easier to explain who we are and what we do. Almost every SDG touches on what we do and have been doing since 1975.
Oikocredit is also working with other impact measuring organisations and standards such as SPTF, GIIN and UN PRI. This not only informs us of the latest social impact research that I talked about earlier, but Oikocredit as a practitioner can inform the research, so it’s a two-way process.
Also, by working with a number of umbrella organisations we can create common understanding across many social impact investors and contribute towards standard frameworks of social impact for our partners to work with. This reduces the data reporting demands from impact investors on the organisations they invest in.
How important is capacity building for achieving social impact?
It’s very important, and we are extremely glad to be working with several well-known institutions such as Brot für die Welt, IDB and others listed in the impact report. Without them our larger capacity building projects would not be possible. Creating opportunities for smallholder farmers and lower income households to manage life’s challenges in a complex and often unpredictable world takes effort at all levels.
Partners that are very effective from a business management perspective may need help in integrating into their operations social performance management to reach more smallholder farmers, for example. On the other hand, there will be organisations that know how to achieve social impact, but are vulnerable on other organisational aspects. For example, a partner may well have started successfully as a family-owned enterprise and now needs to work on their governance.
In both these cases, what you want is for value-chains for the farmer or the borrower end-clients to be strong chains that provide opportunities.
How does Oikocredit support its partners with capacity building?
By knowing the strengths and weaknesses of a partner, our colleagues can support the partner with not only the right type of funding, but also other kinds of support where appropriate, including capacity building. This has been particularly important in the Covid-19 crisis.
Oikocredit has been able to support partners with specific training and financial planning tools, such as setting up business continuity planning and cashflow management in times of crisis. Then through peer exchanges we have helped partners get over the initial pandemic shock. Partners who are managing well through the pandemic have been able to share their experience with those who may not have had to deal with a crisis before. In this way, we can promote solidarity among partners through all kinds of challenges.
Our impact report focuses on reporting the capacity building projects that were directly implemented in the year together with the capacity building institutions and donors. Through long-term relationships with partners and truly engaging with them, we’re able to provide valuable support.
Are some of these pandemic innovations here to stay?
Undoubtedly. For example, we have brought together partners in webinars for support and this is something that I think will continue. Training through webinars is not a new development. But the pandemic has taught us how much can be achieved through online meetings, enabling us to have more frequent contact with partners and also our social impact peers.
Does the impact report highlight any areas where Oikocredit can improve?
Of course, we should always strive to improve. The pandemic has shown us that we can and have improved in how we work together with others in the sector. For example, we are working together with like-minded organisations even more closely than before.
Which achievements can Oikocredit and its supporters be most proud of?
I think it is the effective way in which we keep a focus on the benefit to the end-client and how to do things better, together with the rapid response we have given in the face of Covid-19. We have been able to quickly find out what our partners need and respond to that, to support them in managing their way through the challenges they’re facing.
We’ve seen our partners make similar rapid responses with their end-clients. For example, providing advice to find other opportunities for microentrepreneurs when the pandemic disrupts their usual markets.
Oikocredit members and investors like to hear directly from partners to confirm the end-client focus and continual improvement that we seek in our mission, and Oikocredit is proud to make that happen both in the Impact Report 2020 and through the other regular touchpoints we offer.