Looking back on a year’s journey and forward to 2020
Oikocredit’s Managing Director, Thos Gieskes, looks back on Oikocredit’s journey in 2019 and forward to the new year 2020.
In 2020 Oikocredit will celebrate its 45th anniversary. When Oikocredit was founded in 1975, the concept of impact investing was unknown, and we are proud to have been a catalyst in the exponential growth of this market that’s now estimated to be worth US$ 239 billion1. Today, 45 years on, we remain true to our focus on social impact. You can read more about our approach to social impact in our 2019 Impact Report.
Improving the lives of low-income people remains front and centre for us as we work with close to 700 partners in financial inclusion, agriculture and renewable energy. What also remains undisputed is the need for our work: with 1.7 billion adults still having inadequate access to formal financial services2 and the high demand for funding of small and medium enterprises in agriculture and renewable energy in developing countries.
Since our foundation in 1975, much has changed in the world and for Oikocredit. 2019 was a year of renewal and transition, as well as adjustment to those changes to be able to serve our stakeholders more effectively. We made good progress on implementing our 2018-2022 strategy and adjusted the operating models for our regional and central organisations. This unfortunately meant saying our good-byes to some of our colleagues whose roles disappeared as a result of the leaner operating model. While this hasn’t been easy for anyone involved, we did our best to support staff through this transition and we take comfort in knowing that many colleagues who left have found new roles.
As a result of the strategy implementation we made good progress in reducing our costs and improving the return on our development finance portfolio. We expect to see the full effect of the updated strategy on our financial results only after 2019. Our results remain affected by the low-interest rate environment, with increased competition in many of the markets we are active in.
Being close to our partners is what distinguishes us from most of our peers and it is a personal highlight for me to visit our partners and their clients from time to time. In June, I had the opportunity to visit renewable energy partners in India and was inspired by these social entrepreneurs who are bringing sustainable energy to places where it would not otherwise be. Thanks to our partner Fourth Partner Energy, farmers now have solar-powered water pumps providing a simple mechanism to increase the yield of their land. It was particularly satisfying to see technology harnessed to help people who need it most, not just in the big cities, but the rural areas too.
Another personal highlight was meeting our investors, members and our support associations (SA). Some SAs celebrated their 40th anniversary in 2019. The relentless work of the staff and volunteers of Oikocredit’s support associations is at the core of Oikocredit and makes us a special organisation, as well as a movement in promoting impact investing.
As we go into the new year, we will continue to build on our strengths: our loyal investor network, our partners and our staff across 21 countries. We will continue our strategy journey to improve how we work, how we cooperate and how we ensure partners are front of mind in everything we do.
I believe that the steps we’ve taken to stay relevant as an organisation will increase the joy of working together with partners and investors on achieving our mission of improving the lives of people in low-income communities. I invite you to join us on this journey to accomplish our mission.
1 2019 Annual Impact Investor Survey, GIIN https://thegiin.org/research/publication/impinv-survey-2019
2 The World Bank Global Findex Database 2017 https://globalfindex.worldbank.org/node