Year after year, stock markets boomed. Investment in shares led almost automatically to high financial returns. Then came 2001. Stock markets trembled. Many investments dropped dramatically. Financial returns were often nil or worse.

An exception to the rule was Oikocredit, whose shares in development have for many years given a safe and remarkably stable return financially. And socially too, it seems.

"All around the world, people with little or no collateral to offer are denied access to credit from conventional sources," says Oikocredit general manager Tor Gull. "Already in 1968 church people decided to tackle this problem by creating an investment instrument for churches: Oikocredit. Oikocredit makes loans available to groups of marginalized people who need credit to take a step forward but cannot obtain it elsewhere.

"Over the last 26 years," says Gull, who comes from Finland, "we have given loans to coffee farmers, housing cooperatives and other income-generating projects set up and managed by people at the grassroots. With remarkable results: the vast majority of our partners were able to repay their loans. Their projects became self-reliant and helped families escape from the poverty trap. What we have learned is that credit is indeed a powerful instrument of development."

Double or triple the family income

The cover of Oikocredit's 2001 Annual Report shows the face of one of the many thousands of coffee farmers who have, over time, worked with Oikocredit loans: Señor Hamilton Rivera, a member of the Nicaraguan coffee cooperative Cecocafén. With two Oikocredit loans for working capital and the purchase of a coffee processing plant, Cecocafén was able to offer its 3,000 members better income prospects. The fact that they were also able to sell their coffee via Alternative Trade Organizations (ATOs) literally saved them from bankruptcy in a situation where world coffee prices dropped far below the absolute minimum needed for farmers to survive.

"We have been very successful in supporting coffee farmers with loans, both directly with loans to their cooperatives and with loans to ATOs," says Tor Gull. "Agriculture as a whole is a sector where we can play an important role. Another important sector for us is microfinance. More than 40% of our loans are currently in the hands of microfinance institutions: organizations like Share in India, who split up the Oikocredit loan in very small loans that enable poor women in the countryside of Andhra Pradesh to set up a small grocery, shoe-repair shop or basket-weaving project and thus create for themselves and their families a stable source of income. The results of such small loans are impressive: these people can sometimes double or triple their family income, send their children to school and build a solid roof over their heads."

Oikocredit's total share capital of 160 million Euros originates from thousands of investors from all over the world, among them a growing number of churches. So far, 62 Warc member churches have decided to put their plea for economic justice into practice by participating in Oikocredit. Over 300 project partners currently work with Oikocredit financing, assisted by local professionals working at Oikocredit's twelve regional and nine country offices in Latin America, Africa, Asia and central and eastern Europe.

Further information regarding the mission and work of Oikocredit can be obtained at the Oikocredit International Support Office in the Netherlands. Here, a formal prospectus can also be obtained, with specific information regarding the issuing of shares.

Oikocredit, Tesselschadelaan 4, 3818 WD Amersfoort, the Netherlands, tel 0031 33 422 40 40, fax 0031 33 465 03 36

Credit comes from credo

The social relevance is clear: Oikocredit loans give people in poverty conditions a chance to improve their lives. But the financial return - 2% in 2001 - is modest, especially when compared to the average return on conventional investment funds. Is it hard for Oikocredit to find willing investors? Tor Gull: "Amazingly enough, no, not really. What we see happening is that more and more churches, individuals and all kinds of institutions, even banks, start investing in us. We are very happy with this, as their investments are a clear sign of recognition for our work. But we are also happy to see how firmly Oikocredit is rooted in the ecumenical community: churches of all denominations as well as individual church members. Did you realize that "credit" comes from "credo"? Oikocredit gives shape to the belief of many people within the churches that it is possible to make this world a better place, by listening to each other and by sharing what we have with each other. In Oikocredit, people give credit to each other, in every sense of the word."

Herma Hulst