Profile: Oikocredit

 

Rice farmers of Oikocredit partner, Abrasa, the Philippines 2017. Photograph: Opmeer Reports

 

So much attention is focused on Oikocredit’s good works that it’s easy to forget it is also a business. In 2016 – its 41st year of operations – Oikocredit became quite a chunky business too, surpassing €1 billion in development financing, according to its latest 88-page financial report. Its total investments increased by 16% (year-on-year), while its equity investment portfolio rose by more than 47% (year-on-year) to €113.8 million. So it’s rather reassuring for all Oikocredit’s stakeholders – around 54,000 investors in total, plus all the people it assists around the globe – that it selected in April this year as its new Managing Director someone who is quite at home reading balance sheets.

Thos Gieskes spent almost three decades with Rabobank, the Dutch co-operative bank, including a stint in charge of Rabobank’s Australian business, managing a balance sheet of around A$30 billion and a staff of some 1,200 people across the region. I had the chance to chat with Gieskes and began by quoting back to him something he said when he was first appointed: “I look forward to asking a lot of questions and learning as much as I possibly can.” What questions has he asked: what learning has he done in the short time he’s had the top job at Oikocredit?

Thos Gieskes, Managing Director, Oikocredit International. Photograph: Oikocredit

 

“The best way to answer this,” says Gieskes, “is to share with you how I organised my quest for knowledge. There were four stages. The first was to get to know the company at its HQ in the Netherlands, in Amersfoort, as that’s where the managing board resides. Then I spent quite a bit of time getting to know our investor network, our member networks, and the support associations we have in different countries. The third element was to get to know the world on which we focus our investments, making trips to East and West Africa and Latin America, just to get a glimpse of what we do there. Step four is happening now – getting to know peers and competitors.”

As for what he has learned thus far, he says “it has confirmed the unique attributes of Oikocredit, the perception of Oikocredit both internally and from the outside as a fantastic organisation with passionate and highly motivated people. There’s a very strong sense of belonging and of contributing to achieving the mission of Oikocredit.”

One of the puzzles for me is that, given its size, longevity, scope and impact, Oikocredit is not perhaps as well known outside the social investing world as it might be. Does that perturb Gieskes? “I think that for the people we work with and the people who donate their resources to us, we are very well known. Our focus has always been how can we optimise our impact and be known to the people who might need us or who could assist us, through inclusive finance, agriculture and renewable energy. Our profile outside of Oikocredit is one of those things that we will look at in the future to see whether we should raise this profile or not. But we have a deliberate operating model and it revolves, first and foremost, around social impact.”

Rabobank traditionally has been a big global player in agriculture and I put it to Gieskes that we face a chronic problem – farmers producing basic food commodities such as rice or tea in emerging countries seem condemned to relative poverty largely because we in developed economies are not prepared to pay higher prices for their produce. This problem looks like it might only become exacerbated by the news that some major UK supermarkets are about to drop the Fairtrade mark and replace it with the phrase “fairly traded”, a sleight of hand that has passed almost without notice and certainly without much explanation. “I agree that this is a problem but I would not necessarily agree that it can only be solved by people paying higher prices, in the UK or anywhere for that matter,” says Gieskes.

Tea farmers of Oikocredit partner, Ambootia Tea Estates, India, 2017. Photograph: Opmeer Reports.

 

He continues: “Essentially there is a whole value chain between the farmgate and the supermarket. I think one of the fundamental solutions to ensure that farmers get a better reward for their product is to connect them better into that value chain, so they can capture more of the value that is created in that value chain. Because they tend to be small, they just get marginalised by the next step above them in the chain. There are people in those value chains who make a lot of money. That’s why co-operatives are so important in the agriculture space – they allow farmers to unite and get a better bargaining position in the chain. But there’s no silver bullet – these issues need to be constantly addressed. I think if you look at what Oikocredit wants to do in general, it is to work with people at the bottom of the pyramid – to give them the opportunity to rise out of poverty in a sustainable way.”

All in all, there seems little doubt that Oikocredit – a member of the Social Stock Exchange – looks set to fare well for the next 40 years; and as the world goes through its own ructions of the coming four decades this international co-operative and social investor, headquartered in the Netherlands, will become even more precious – and perhaps better known.

 

 

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