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OIKOCREDIT @ 50: AIMING HIGHER FOR AFRICA

The idea to form Oikocredit was conceived way back in 1968 during a meeting of the World Council of Churches. Globally at that time, there was a major push in many forums to promote peace and justice. Christianity is anchored on the pillars of justice, love and harmony. Therefore, many speakers during the World Council of Churches meeting lobbied for the establishment of a Christian organization that would promote social justice by providing credit to enterprises under the management of economically active individuals from low-income backgrounds. This powerful and transformative idea saw the light of day in 1975 with the establishment of Oikocredit Development Co-operative Society (ECDS).

Many Christians (mainly from Europe) who were keen on alleviating the plight of disadvantaged people in various parts of the world contributed generously to the new organization. Consequently in 1978, the ECDS embarked on its first projects in India and Ecuador. Derived from Oikos (a Greek word meaning house, community and world) and credere (Latin word which means ‘to believe’), Oikocredit believes in transforming the lives of households with low incomes. Against this background, for the last fifty years, the organization has worked to empower people around the world and help them improve their lives and livelihoods.

With a portfolio of more than a 1 billion Euros, Oikocredit has a strong presence in Africa, Asia and Latin America. According to Dave Smit, the director of impact investment, globally, through its partners, the organization has EUR 1,029.8 million outstanding in development finance as at September 2024, reaching 53million people. “We do that to change people’s lives for the better – particularly those with low incomes,” he says.

November marked the beginning of Oikocredit’s International fiftieth anniversary celebrations. The climax of this momentous journey will be November 2025.

Aiming higher for Africa

Oikocredit started its operations in Africa thirty years ago (1993) by opening an office in Accra, Ghana. In 1994, it opened two more offices in Abjidjan, Ivory Coast and Nairobi, Kenya. This journey has borne a lot of fruits. Caroline Kamau Mulwa, the regional director of Oikocredit in Africa is coordinating the celebrations in the continent. “It has been an amazing journey for us since we commenced our operations in Africa,” says Caroline. “We started by lending to small co-operatives based in rural areas but today, we are lending even to commercial banks since our capital has grown,” she adds. By the same token, Oikocredit’s partners have also grown – a number of them have either transformed from credit-only microfinance institutions to either commercial or microfinance banks. This demonstrates that as a wholesale lender, Oikocredit has been able to respond to their needs.

Oikocredit team together with partners during the thirtieth anniversary breakfast event.

Currently, Africa accounts for about 22% of the global portfolio. According to Caroline, Oikocredit has disbursed about 200 million Euros across the continent, reaching over 2.3 million smallholder farmers and creating 5,500 and 55,000 permanent and temporary jobs respectively. “We are able to work with our partners, helping them to identify the social indicators that they can track and report back to us,” avers Caroline.

The phenomenal growth of Oikocredit can be attributed to the fact that it lends for good as opposed to profits. This is in line with its strong Christian foundation and transformative agenda. In that regard, it focuses on three major areas: financial inclusion, sustainable agriculture and renewable energy. Alongside these three areas, Oikocredit aims to strengthen community resilience through its current Community focused approach. Through partnerships, Oikocredit provides funding and technical assistance in the areas of Education, Water, Sanitation and Hygiene (WASH) and Affordable housing. To enhance financial inclusion, Oikocredit has partnered with microfinance banks and institutions as well as commercial banks lending to small and medium enterprises (SMEs). “By financing these partners, they are able to support their clients to start and grow small enterprises, earn income in the process, and ultimately lead a dignified life,” says Caroline. “These clients are able to educate their children and build decent houses once their enterprises succeed, which demonstrates that the financing has been impactful,” she adds. Oikocredit has also embraced a new community focused approach to social investing. The objective of this model is to enhance innovation in the organization’s work, making it stronger as a catalyst in social investing. It also takes into consideration the fact that beyond credit, communities face other pressing needs – for instance poor housing and public infrastructure, inability to access quality education and health facilities as well as climate change. Unless such challenges are addressed, it is difficult for communities to be resilient and to unlock their full potential.

Secondly, Oikocredit has partnered with organizations buying raw materials from smallholder farmers. This intervention comes in handy for smallholder farmers since it provides them with a reliable sourceof income and a steady market for their produce. Consequently, they are able to meet their social goals like educating children and putting up decent housing.

Under renewable energy, Oikocredit partners with enterprises that support rural households by providing them with clean energy solutions. These solutions include energy saving cooking stoves, pay as- you- go solar home systems as well as solar mini grids. They mainly target rural households that are far away from the national grid. This in particular eases the burden of women since they don’t have to travel for long distances to fetch firewood. In the same vein, by using clean energy solutions for cooking and lighting, the health of household members is not compromised.

Oikocredit has a presence in twelve African countries – five each in East Africa and Francophone West Africa and two in Anglophone West Africa. “We selected these twelve markets because of the ease of doing business in comparison with other markets in Africa,” Caroline observes. Despite the operating environment – high inflation, foreign currency fluctuations and political upheavals – in some of these countries being a bit challenging, Oikocredit has soldiered on. “We have to be innovative in order to meet the needs of our partners, the challenges in the market notwithstanding,” reassures Caroline.

With a young population and vast natural resources that are not fully tapped, Africa holds a lot of promise for the global socio-economic growth. Having been in the continent for thirty years, Oikocredit has learnt a lot about Africa’s untapped potential. The organization has therefore engaged a higher gear to unlock this potential as manifested in an apt mantra: ‘Aiming Higher for Africa.’ “When I became the Africa Director, as a team, we decided to come up with a mantra would inspire us to work harder and smarter every day,” says Caroline. “Therefore, through a consultative process, we came up with a mantra, Aiming Higher for Africa,” she adds. According to Caroline, this clarion call is for the entire African continent, and not just the countries where Oikocredit has a presence.

Indeed, by providing innovative financial solutions, Oikocredit is determined to change the fortunes of Africans. “Internally, we are very responsive to the changes that are around us,” Caroline affirms. “We therefore align our products to the needs of our partners,” she adds. Most importantly, Oikocredit has created long-term relationships with its partners, leading to its solid growth. Looking back at what the organization has been able to achieve in Africa during the last thirty years, Caroline is confident that there is room for more growth. “To all our partners, as we celebrate our thirtieth anniversary, let’s join hands, and let’s aim higher for Africa,” she ends with optimism.

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