Solidarity: the strength of our network
Thos Gieskes, Managing Director & Laura Pool, Director of Finance & Risk
In this interview we catch up with our Managing Director, Thos Gieskes, and our Director of Finance & Risk, Laura Pool, to reflect on the June annual general meeting (AGM). They talk about the decision to not pay a dividend for 2019, how Oikocredit supports its partners during the pandemic, and more.
Oikocredit’s AGM was held for the first time via video conferencing. What was this like?
Thos Gieskes: It was unfortunate that due to Covid-19 we could not all be together in one place, but it was an interesting experiment. Usually the AGM is just one day of a week of meetings where the cooperative comes together to debate topics. And that’s the part we missed this year, the many points of contact to discuss and debate, both formal meetings and the chats over a coffee or dinner.
In the end, you could say that it’s efficient to have meetings by video, and the decisions made would probably be the same, but it’s not the best way to meet as a cooperative. An interesting outcome was that you might have expected more members to be represented at the AGM, but in fact attendance was a little lower.
The positive aspect is the saving on our carbon footprint. In fact, this topic was debated and members voted to reduce travel to one in every three years, for AGMs held in a partner country.
What other topics were discussed at the AGM?
Laura Pool: There were the usual business updates and discussions on annual results, and then a proposal to set the dividend for 2019 at 0%. This 0% proposal by the Managing Board was based on a revised assessment of the global economic outlook and how that could affect our financial position.
Oikocredit operates across the globe where there is much uncertainty and we need to be prudent, safeguarding our available assets to have sufficient cash to run our business and particularly to have healthy capital reserves. So we proposed no dividend to be paid, and announced this in early May so that our support associations would have the opportunity to discuss this amongst their members.
It was helpful that we had this opportunity prior to the AGM to hear comments and concerns. For the last 32 years Oikocredit has paid a dividend and so it was important to debate this satisfactorily before making such an important decision.
Thos Gieskes: The majority of members were in favour of the 0% dividend proposal and several support associations had themselves already considered making a proposal for a 0% dividend. There was a consensus that due to the current uncertainties around the impact of Covid-19, we needed to safeguard our financial resources and business continuity as much as possible.
How have Oikocredit’s priorities changed from pre-coronavirus plans?
Laura Pool: We are not financing new partners but are focused on supporting the partners we already have; through advice, bringing them together and with financial help where possible. For the time being our plan to expand the number of partners is on hold, while we also keep an eye on the market for when the time is right for new initiatives and areas where we can expand. On the inflow side, we are focused on keeping our current investors informed and updated.
It therefore remains unlikely that we will grow our balance sheet this year, and so we will see lower returns and be putting aside additional money to cover higher risks in the existing portfolio.
In the meantime, we are constantly evaluating various scenarios of the impact of Covid-19 as more is known and as governments respond with the making and lifting of restrictions, or measures to mitigate the economic effects. This “stress testing” is carried out frequently and enables Oikocredit to be ready to respond quickly if a situation in a country deteriorates or improves.
In all, I would say that the crisis has highlighted the importance of our inclusive finance work. It also focuses on the value of our capacity building work to develop our partners’ resilience in an uncertain world. This year it’s a pandemic, another year it could be events relating to climate change that impact our end-clients’ livelihoods.
Our approach is the same throughout this crisis, and an extension of our business as usual. We strive to keep our investors and members informed about what is happening (see our coronavirus updates), and we work with our partners on an one-to-one basis to support them as best we can with what they need.
How have you seen Oikocredit’s network coming together during these unprecedented times?
Thos Gieskes: We constantly learn about the strength of our network of investors and support associations. We know we have patient and loyal investors who are committed to Oikocredit’s mission. But we also learn how well our support association network works at managing investor relationships, so that we understand our investors’ needs and how they are thinking. This is so important and especially at a time of crisis.
Our investors want to know how we are doing on the outflow side. Right at the beginning of the crisis our outflow colleagues got together (virtually of course) and agreed that they will be in contact with each partner at least on a biweekly basis to see how they’re doing and to assess what assistance is required. On the back of that, our Social Performance Innovation department initiated online training and webinars, to help partners support each other with knowledge sharing (see resources for partners).
This effort was brought about by staff who are themselves working under new challenges, perhaps working from home with a poor internet connection. They are doing precisely what is needed and that is staying close to our partners.
From these initiatives it emerged that some of our partners needed support beyond our normal financial activities or capacity building, and that is where our coronavirus solidarity fund initiative sprung from. The startup funding came from Oikocredit’s own foundation and this was quickly followed up by donations from our support association members. And so you see here a complete loop of everybody working together to get through this crisis as well as we can. It’s at times like these that you actually know that you can count on each other.
Whether the worst is behind us, or in front of us, none of us know. All we can do is prepare and rely on each other. In this way, I am convinced that we will emerge from this crisis, a stronger Oikocredit.