THE LAB

Meet Oikocredit: one of the most progressive, transparent, community-driven and mission-driven microfinance institutions (MFIs) in the world, and a global leader in the microfinance movement. Microfinance is making small loans of less than $200 to the working poor in developing countries, where these loans are used to establish or expand small businesses that generate additional income for families.  While the microfinance industry has exploded in the last 10 years, Oikocredit has maintained its commitment to the original values that inspired the creation of the organization in 1975 – transparency, authenticity, community engagement and ultimately the mission to end global poverty.

As a pioneer in the field of microfinance, Oikocredit has demonstrated the importance of extending financial services to poor communities by working with non-traditional micro-lending organizations such as non-govermental organizations (NGOs), and credit and savings cooperatives. These are more risky than traditional MFIs, but they often provide a vital connection serving the poorest of the poor.  Even at the leadership levels, a commitment to community empowerment is reflected in Oikocredit’s Board of Directors, as many board members harken from the Global South. Other microfinance institutions (MFIs) have begun sacrificing social contributions to focus on maximizing profits; these organizations justify their high-interest loans to the poor using the rationale that their rates still undercut those charged by loan sharks. Read Business Week’s coverage of the “ugly side of microlending” here.

In the midst of the MFI explosion in the past decade, Oikocredit and other “good guys” in the industry are realizing the necessity for community engagement and transparency. Industry transparency will help Oikocredit’s 32,000 investors understand the value of investing in low-income entrepreneurs. Specifically, Oikocredit is committed to social performance metrics, not simply the financial bottom line. Their use of the Progress out of Poverty Index (PPI) allows the organization to measure poverty in communities and respond directly to entrepreneurs’ needs, helping them to move quickly into stronger financial footing.

Over this past year, Re-Vision Labs has developed a unique partnership with Oikocredit.  Oikocredit’s commitment to its core values spoke to Re-Vision Labs. Recognizing Oikocredit’s unwavering commitment to transparent social and financial sustainability, RVL is pleased to align efforts in order to tell Oikocredit’s story to a broader audience, empower microfinance investors to be change-makers, and strengthen the industry through the development of standards. Together, RVL and Oikocredit are designing a grassroots movement to support world-changing ideas.

Click here to see the online products we’ve created together, and to learn more about Oikocredit in the US.

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