Q4 2020 quarterly report: Proving our resilience

Q4 2020 quarterly report: Proving our resilience

Untitled design (7).png30 March 2021

Four times a year Oikocredit publishes key facts and figures on the previous quarter. Here we provide our investors and others with additional background context on developments during the fourth quarter of 2020.

Managing Covid-19 and economic uncertainty

The effects of the coronavirus (Covid-19) pandemic continued to be mixed in Q4 2020. Some countries experienced an element of economic recovery, although ‘second waves’ of the pandemic and new government lockdowns also occurred. Economic uncertainty remained widespread. Oikocredit closed the year with a sense of gratitude to its members and investors for their loyalty, satisfied that it had provided solidarity and support to its partners, and with renewed confidence in the robustness of its business model.

In Q4 we worked with and supported 563 partner organisations across 63 countries in Africa, Asia, and Latin America and the Caribbean.[1] Oikocredit’s outstanding portfolio of loans and equity investments reduced slightly in Q4 by 1.3% to € 845.1 million. This was a much smaller decrease than in Q3. But it reflected the fact that many partners repaid their loans during the quarter, the caution we maintained in disbursing new loans to existing and new partners (nevertheless an increase from € 143 million in Q3 to € 243 million) and foreign exchange effects of appreciation of the euro and to a lesser extent the US dollar against local currencies.

We continued to allow repayment relief to partners in need. Fortunately, while we had expected more lasting setbacks for our partners, many were able to return to scheduled repayments. By year-end, only 69 partners, with loans representing 20.5% of the value of the total loan portfolio, still needed payment holidays. Our formal measure of portfolio quality, the PAR 90 ratio (the percentage of loans with repayments at least 90 days overdue), improved during the quarter from 6.9% to 5.8%.

Oikocredit made a net loss during the quarter, bringing the total loss for the year to € 22.2 million 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. Our liquidity ratio increased slightly during Q4 from 31.9% to 33.1% of our assets, a much smaller rise than in the previous quarter. We consider the annual results satisfactory given the extraordinary events of the past year.

Members and investors’ loyalty and commitment

The way our members and investors – the latter investing via our support associations and the Oikocredit International Share Foundation – stayed with the cooperative despite the economic uncertainty remained crucially important. Total member capital, including requests for issuance and redemption received up until the end of November 2020, declined by 2.4% from € 1,131.7 million in Q3 to € 1,104.1 million, a smaller fall than might have been expected given the wider economic context. Net asset value (NAV) per share reduced very marginally, from € 210.54 in Q3 to € 210.50, marking something of a return to stability. For the year as a whole, NAV fell by 1.8% from € 214.41.

Consistent measures safeguard business model

Maintaining the approach Oikocredit had adopted in the early months of the crisis helped ensure that our business model remained robust in Q4. We kept close online and telephone contact with partners. Besides arranging refinancing and payment holidays, we used our coronavirus solidarity fund to help 38 partners in 19 countries with emergency grants over the course of the year, and we provided many partners with crisis management support, training and regular webinars, which were much valued. We are also satisfied to have maintained our capacity building programmes in 2020, despite Covid-19. Total expenditure for the year was at the same level as in 2019, € 0.7 million, supporting 71 existing and potential partners in 26 countries.

As earlier in 2020, in Q4 we attended carefully to the well-being of our Amersfoort and worldwide staff who continued to work from home. The commitment of our staff, together with our reorganisation during 2019, helped us react quickly and effectively to the pandemic, and we kept costs under control.

Future outlook

Based on the 2020 loss and the medium-term financial outlook, the Managing Board, supported by the Supervisory Board, will propose that the Annual General Meeting in June 2021 award no dividend for 2020. This will help protect Oikocredit’s reserves and its members’ capital and will support partners in rebuilding their businesses post-pandemic.

The coming year will be challenging, despite signs of an economic upturn in some of the countries where Oikocredit is active. Unforeseen external developments may impact our ambitions, but we nevertheless expect to see overall recovery in the second half of 2021. The cooperative is working with stakeholders to prepare a new purpose-driven multi-year strategy to be launched in 2022. Our model of providing close support to partners and delivering both financial and social returns to members and investors has proven enduring. With Covid-19 not only impacting on human health and livelihoods but also reversing recent years’ decreases in global poverty and inequality, especially for women and girls, Oikocredit’s mission remains as important as ever. We are determined to come through the crisis better in support of the sustainable empowerment of low-income people in the Global South.

More details will be available in Oikocredit’s Annual Report 2020 which will be published in mid-April.



[1] In our Q3 report we reported that we worked with and supported 689 partners in 65 countries as at 30 September 2020. It came to our attention that the way we counted the partners in previous quarterly reports (which included partners with approved but not yet disbursed loans) was not aligned with the method used in our annual report (which excluded partners with approved but not yet disbursed loans). We have now aligned how we count partners in quarterly reports with the method used in the annual report. Applying the counting method from the annual report, our partners in Q3 amounted to 604.

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