How social investments 'circulate'
As a social investor, Oikocredit is certified by various organizations on its sustainable investment portfolio. One of these certifiers is Forum Ethibel, a Belgian-based NGO which provides a label guaranteeing to investors that the organization has scored well in all areas of corporate social responsibility. We spoke with Herwig Peeters, Forum Ethibel's director, about the world of social investments and savings and why he’s involved in this sector.
In your professional opinion, how important are social investors like Oikocredit?
“Investors like Oikocredit are very important, as they use their investments to contribute to development and improve the lives of people across the world. I have heard many testimonies, and studied reports myself, concluding that € 1,000 virtually becomes many thousands of euros in the developing world through guarantee schemes and leverage effects. Essentially, money circulates. For me, circulation is the key word. Money is not just left sitting and generating interest but contributing to people’s lives and their future.”
Oikocredit has been working with Forum Ethibel for many years in relation to the sustainable management of its reserves. How does that work?
“A part of Oikocredit's reserves is invested in a bond fund, the 4F Fund. This fund includes bonds in developing countries, development banks and businesses, making it a unique and sustainable bond portfolio, with a good track record. Forum Ethibel thoroughly screens the countries, organizations and businesses drawing up a list of values that the 4F Fund can invest in. Forum Ethibel also keeps a close eye on whether the fund maintains its social mission. That is how we guarantee that Oikocredit's reserves are being re-invested with maximum sustainability.”
You've been working with Oikocredit for a number of years. What's your opinion of the work it does?
“I am very impressed by the fact that a development investor, which has investments in microfinance institutions and other social enterprises, continuously manages to expand and remain stable. Choosing the right products and a sound approach helps Oikocredit achieve a 'soft but solid return'. Oikocredit proves that this combination definitely works.”
Is that why you became a shareholder yourself?
“Yes, I have used a part of my personal financial reserves to purchase shares from Oikocredit Belgium. In my opinion, my money is much more effective than sitting in a bank as it contributes to people's lives in developing countries.”
Can you explain how social investors have managed such strong growth during the economic crisis?
“I think there was a growing interest already in 'dealing with money in an ethical way'. This had been reinforced in recent years by the increasing dislike and distrust towards the dealings at some large financial institutions. As a result, people and organizations are actually moving to sustainable investments and financial products. The fiscal incentives from the government and the current low interest rates also probably play a role.”