Oikocredit reports year of achievement and recovery
Amersfoort, the Netherlands – Social impact investor and worldwide cooperative Oikocredit today published its annual results for 2021. The cooperative has rebuilt and rebalanced its development financing portfolio successfully after the disruption caused by the Covid-19 pandemic and has resumed growth.
Net consolidated result: € 15.3 million (2020: € 22.2 million loss)
Total consolidated assets: € 1,258.1 million (2020: € 1,241.7 million)
Total member capital: € 1,129.0 million (2020: € 1,104.1 million)
Net liquidity as % of total assets: 21.5% (2020: 33.1%)
Net asset value per share (NAV): € 213.58 (2020: € 210.50)
Development financing portfolio: € 995.9 million (2020: € 845.1 million)
517 partners in 55 countries (2020: 563 partners in 63 countries)
Five partners making use of a ‘payment holiday’ at year-end (2020: 69)
50 current and potential partners benefiting from a capacity building spend of € 0.4 million (2020: 71; € 0.7 million)
58,900 individual and institutional investors (2020: 58,400)
Proposed dividend yield: 0.5% (2020: 0%)
Rebuilding, rebalancing and preparing for the future
In 2021, despite the pandemic persisting for a second year, Oikocredit maintained member capital stability and rebuilt its development financing portfolio as partners in its focus countries generally returned to the path of economic growth. The cooperative met its objectives in terms of financial results, risk management, social impact and preparing for the future.
The positive result of € 15.3 million, overturning 2020’s pandemic-impacted net loss of € 22.2 million, was in line with expectations and owed much to the loyalty of members and investors, to staff commitment and to partners’ resilience. Total consolidated assets rose to € 1,258.1 million (2020: € 1,241.7 million).
Oikocredit navigated changes at Supervisory Board and Managing Board level while creating a sound basis for the further strategic and organisational changes the cooperative has agreed to make. The recent worsening of world poverty shows the continuing importance of impact investing to support products and services that help low-income people achieve lives of dignity.
Oikocredit’s portfolio of loans and equity investments grew by 17.8% from € 845.1 million to € 995.9 million as lending increased to current and new partners. Financial inclusion, the cooperative’s largest focus area, increased by 18.7% to € 761.4 million (2020: € 641.3 million). In agriculture the portfolio grew 22.8% to € 182.6 million (2020: € 148.7 million), while in renewable energy there was a small decrease of 4.3% to € 43.7 million (2020: € 45.7 million).
Portfolio growth was fastest in Africa, at 38.0%, in line with the ambition to expand exposure there. The portfolio increased by 33.3% in Asia and by 7.5% in Latin America & the Caribbean. Total lending grew by 21.7% during the year, while investments in equity partners decreased by 0.3%.
Portfolio quality remained stable. Portfolio at risk (the percentage of the credit portfolio with payments more than 90 days overdue) closed the year at 5.5% (2020: 5.8%). Only two partners (2020: 136) requested a ‘payment holiday’ during the year, a temporary measure introduced in 2020 as the pandemic took hold. At year-end, five partners were still making use of a payment holiday (2020: 69), and 90% of our outstanding capital was being repaid on time.
Social performance and capacity building
Oikocredit took a major step forward in social performance management with its first digital client self-perception survey. This enabled the cooperative to hear from more than 2,500 clients of current and former partners in Kenya, Peru, the Philippines and Uganda about changes affecting their income, savings, business development and household well-being.
Oikocredit helps partners to build resilience and to support positive change in the lives of low-income people by providing training, advice and other forms of assistance. In 2021 the cooperative spent € 0.4 million (2020: € 0.7 million) on capacity building support for 50 current and potential partners. Examples include providing price risk management training for Latin American coffee cooperatives; training Cambodian smallholder farmer cooperatives in strengthening organisational capacity and in financial accounting; and supporting a project in Ghana to foster the growth of women-led enterprises. These initiatives are made possible by generous funding from donors and are often implemented in collaboration with other organisations.
The Innovation in Response to Covid-19 programme, launched in 2020 with unused coronavirus solidarity funds, continued to help partners and former partners develop adaptive client-appropriate solutions for problems generated by the pandemic.
With the global economy in at least partial recovery, the cooperative’s annual inflow of member and investor capital through the support associations and the Oikocredit International Share Foundation returned to growth. Member capital rose by 2.3% to € 1,129.0 million (2020: € 1,104.1 million). Members and investors continued to receive quarterly updates on Oikocredit’s financial performance (unaudited) and on the effects of the pandemic.
Following two years in which no dividend was paid, Oikocredit’s Managing Board, with support from the Supervisory Board, will propose the declaration of a 0.5% dividend for 2021 to the cooperative’s members at the Annual General Meeting in June 2022, subject to the condition that no major incidents occur that negatively impact Oikocredit’s financial position prior to the meeting.
Looking to the future
Combined with the financial and social returns achieved in 2021, Oikocredit has prepared for two key strategic changes. The first is the new organisational strategy for 2022-26, developed with cooperative members and other stakeholders. This will include creating a global investor movement and a holistic approach to investing to help low-income communities build resilience. A small number of these community-focused projects are being piloted, with a more comprehensive roll-out to follow in the course of the year. The second strategic change, on which Oikocredit has also consulted widely, will be the move to a new capital-raising model which will be proposed to the cooperative’s members at the next General Meeting.
Mirjam ‘t Lam, who succeeded Thos Gieskes as Managing Director in 2021, said: “This has been an important year for Oikocredit and for all who work with and for our cooperative. We will continue to respond with agility to new opportunities and challenges and to deliver impact for the people we serve.
“With our new strategic attention to building and stimulating the resilience of communities, we aim to stay at the forefront of innovation in development financing. And we will strive to build a greater sense of community among our members and investors, strengthening Oikocredit as a movement, while continuing to future-proof the organisation.”
More information is available in the Oikocredit 2021 Annual Report at www.oikocredit.coop/annual-report.
Social impact investor and worldwide cooperative Oikocredit has 46 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 & the Caribbean to improve their living standards sustainably. For more information: www.oikocredit.coop.
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