Going above and beyond: Oikocredit’s Social and Environmental Performance Report [Interview]

1. Why is reporting on the social and environmental performance of partner organisations important to Oikocredit?

Oikocredit achieves social impact through the work of the partner organisations it supports; the aggregate of their performance reflects the impact of our investments. Social impact, safeguarding the environment and fair financial returns are not only crucial to Oikocredit, but also to its members and investors who believe in our mission: to provide financial services and support to organisations to help improve the quality of life of low-income communities in a sustainable way. We want to be transparent and hold ourselves accountable by reporting on how we are performing in relation to this ambition.

Similarly, we want to cultivate the same spirit of transparency and accountability among our partner organisations by asking them to report on how they are doing in relation to their objectives and targets. Screening, monitoring and analysing social performance also helps us to identify areas where partners need support and where we could add value through capacity building.  

2. What does the report reveal about Oikocredit at this point in time?

It shows that we aim to go above and beyond to ensure that our partner organisations are doing the best possible job to serve their clients. For example, we not only look at their outputs and activities but also at the consistency between their social mission and conduct as reflected in their policies. These policies include upholding client welfare, promoting gender equality, environmental awareness and protection, and more. We also look at staff satisfaction and pay attention to governance in terms of how their social mission and objectives are addressed by their board and management.  

Report results show that we are successfully reaching our target groups. Our inclusive finance portfolio is doing well in terms of reaching women and our agriculture portfolio is doing well in terms of the number of smallholder farmers reached.

3. Are there any significant changes or new developments in this edition of the SEPR?

We have adjusted the structure of the report to reflect the three priority sectors we finance: financial inclusion, agriculture and renewable energy. The previous versions of the report presented our development finance portfolio in two segments.

 4. What are some of the key highlights and themes to look for in the report?

One of the highlights we see is that Oikocredit continues to surpass the sector average for outreach to female microfinance clients. Almost 90% of our partner organisations’ clients are women, whereas the sector average is currently at 70% as reported in data for 2016 in the latest Symbiotics MIV Survey.

The report also reveals a significant increase in the numbers of households reached by our renewable energy projects.

In addition, our monitoring shows that new approved projects have better environmental ratings. This means that more of our partner organisations are: compliant with environmental regulations, securing certifications relevant to the nature of their operations (such as organic and fair trade certifications), implementing environmental education programs and raising awareness about the vulnerability of the environment.  

 5. How is Oikocredit helping partners strengthen their social performance?

We have seen that some of our partner organisations have very strong social objectives, but have trouble measuring their results. This is a key area where they need help and it’s not only important for them as social organisations, but it’s also important for us. We want to hold our partners accountable to ensure that our investments are being used in a way that actually helps make a positive impact in the low-income people that our partners serve.

Therefore, we help partners evaluate and determine which indicators they can use to monitor their social impact. In addition, we develop an action plan with them so that measurement and monitoring can be embedded in their operations.

 6. Are there any areas where Oikocredit wants to provide further support to its partners organisations?

Our monitoring shows that partners need support in the area of digitalisation and in understanding the ‘fintech’ wave, and what this could mean to them and their clients in terms of opportunities and challenges. This area has been developing extremely fast with $31 billion being invested in fintech globally each year. However, some of Oikocredit’s partner organisations still don’t know much about this area and those who are involved in it, have yet to translate efficiencies into lower costs for end clients.

There is also a need for product development as not many partner organisations have products other than credit when other services such as savings facilities, for example, are also extremely important. So we want to be able to help our partner organisations develop in this area.

Oikocredit already took several steps in this direction by working with a digital microfinance institution on client protection principles and by joining an alliance of over 50 fintech investors and digital finance innovators in developing new global guidelines for responsible digital financial inclusion.  

Read the Social and Environmental Performance Report