Oikocredit’s annual results reflect resilience and solidarity
Amersfoort, the Netherlands – Social impact investor and worldwide cooperative Oikocredit today published its annual results for 2020. While the effects of the coronavirus (Covid-19) pandemic had implications for the cooperative’s income, assets and portfolio, business continuity is secure thanks to the loyalty of its investors.
- Net consolidated result: € 22.2 million loss (2019: € 14.3 million profit)
- Total consolidated assets: € 1,241.7 million (2019: € 1,310.4 million)
- Total funds available for investing: € 1,213.4 million (2019: € 1,271.2 million)
- Net liquidity as % of total assets: 33.1% (2019: 19.6%)
- Net asset value per share (NAV): € 210.50 (2019: € 214.41)
- Development financing portfolio: € 845.1 million (2019: € 1,064.6 million)
- 136 partners assisted with repayment relief
- 71 current and potential partners benefiting from a capacity building spend of € 0.7 million (2019: € 0.7 million).
- 58,400 individual and institutional investors (2019: 59,000)
Business model in good shape despite the pandemic
With the onset of Covid-19, Oikocredit prioritised supporting partners, controlling risks and securing its finances through high liquidity and tight cost control. This meant deferring growth and freezing lending to new partners until some of the worst effects of the crisis began to recede. The vast majority of investors remained with Oikocredit, and it was thanks to their support that business continuity was secured. Nevertheless, Oikocredit’s financial performance in 2020 could not escape the consequences of Covid-19, and the cooperative saw a net loss of € 22.2 million and a slight decrease in consolidated assets to € 1,241.7 million.
Oikocredit took prompt measures as the pandemic spread to safeguard its business model of providing credit, equity and capacity building to its 563 partner organisations working in inclusive finance, agriculture and renewable energy. As a result, these partners could continue to help improve the lives of low-income people in 63 countries across Oikocredit’s focus regions of Africa, Asia, and Latin America and the Caribbean.
The cooperative also provided frequent updates to its members and investors via the designated web page www.oikocredit.coop/covid-19 and paid close attention to the well-being of its people. The commitment and responsiveness of its staff and the organisational restructuring achieved during 2019 also helped Oikocredit quickly and effectively address the effects of the pandemic.
Partners valued the crisis management training that Oikocredit offered as well as regular webinars, repayment deferrals, refinancing where needed and grants from its coronavirus solidarity fund. Oikocredit’s development financing portfolio of loans and equity investments reduced from € 1,064.6 million to € 845.1 million due to the temporary freeze on new partnerships, decreased economic activity among current partners, and foreign exchange effects. The appreciation of the euro, and to a lesser extent the US dollar, against local currencies diminished the euro value of the portfolio overall. Interest income fell as a result of portfolio shrinkage, the repayment holidays Oikocredit arranged for partners in distress, and the falling value in euros of local currency and dollar repayments.
Financial inclusion, Oikocredit’s largest priority sector, suffered considerably more from the economic downturn than its other sectors of agriculture and renewable energy. The financial inclusion portfolio declined by more than a fifth to € 641.3 million (2019: € 826.3 million), although the fintech (financial technology) segment grew. Oikocredit's agriculture and renewable energy portfolios decreased less, to € 148.7 million (2019: € 172.3 million) and € 45.7 million (2019: € 52.1 million) respectively.
Portfolio quality recovered towards year-end after declining earlier. The percentage of Oikocredit's lending with payments more than 90 days overdue closed at 5.8% (2019: 5.4%). Throughout the year Oikocredit granted temporary repayment relief to 136 partners, of which 108 were able to resume payment of capital and interest in the second half of 2020.
Investors’ loyalty and commitment
The way Oikocredit’s members and investors stayed with the cooperative despite the economic uncertainty caused by the pandemic and government lockdowns was crucially important. Member capital, which includes requests for issuance and redemption that Oikocredit received up until the end of November 2020, fell slightly by 2.3% to € 1,104.1 million. Based on the 2020 loss and the medium-term financial outlook, Oikocredit’s Managing Board, supported by the Supervisory Board, will propose that the AGM in June 2021 award no dividend for 2020, to protect Oikocredit’s reserves and its members’ capital and to support current and new partners in rebuilding their businesses sustainably post-pandemic.
Looking forward: cautious optimism
The coming year will be challenging, despite signs of economic recovery in some of the countries where Oikocredit is active. The cooperative is working with stakeholders to prepare a new purpose-driven multi-year strategy to be launched in 2022. Oikocredit's model of working closely with partners and delivering both financial and social returns to investors has proven robust. And with the pandemic resulting in increasing inequality between and within countries, the cooperative's mission is as necessary as ever.
Thos Gieskes, Managing Director at Oikocredit, said: “We are proud of the way our partners have coped with Covid-19 and of the solidarity and support we have provided. We cannot thank our members and investors enough for their long-term belief in our work, and our staff for making a success of home and remote working.
“This unprecedented year has brought useful lessons for Oikocredit and cleaned the lens through which we see the world. We are determined to come through stronger and better in support of the sustainable empowerment of low-income people. External developments may impact our ambitions for 2021 and require us to respond to new situations, but we look ahead with confidence.”
More information will be available in the Oikocredit 2020 Annual Report published in mid-April 2021.
Social impact investor and worldwide cooperative Oikocredit has 45 years’ experience funding organisations active in financial inclusion, agriculture and renewable energy. Oikocredit’s loans, equity investments and capacity building aim to enable people on low incomes in Africa, Asia, and Latin America and the Caribbean to improve their living standards sustainably. For more information: www.oikocredit.coop.
Note for editors:
For more information, please contact Ulrike Haug, Communications Manager, Oikocredit International: telephone: +31 6 25 65 53 75 or email: email@example.com