Development bank encourages antipoverty investment

National Catholic Reporter, March 11, 2005 by Patricia Lefevere

Loan criteria

To obtain an Oikocredit loan, a borrower must demonstrate that the proposed project is viable, will benefit poor people, empower women, protect the environment or have a direct impact on the community. Individuals seeking microcredit need to have other workers supporting their enterprise.

Over three decades Oikocredit has financed more than 500 groups of coffee growers, fishermen, weavers, market vendors and cottage industries in some 60 nations of the Third World. Lending periods vary from three to 10 years.

The society has grown tremendously in recent years, especially in Africa and Asia, so much so that it has been designated the largest private international provider of microcredit in the world by the Consultative Group to Assist the Poor, a research arm of the World Bank.

Kibui credits much of the growth to the society's dedicated staff and its efficient and forward-looking general manager, Tor Gull, a Finn. When it comes to the work of development, "the Dutch style of partnership, of 'we can do this together,' has proven attractive with our partners," she said.

The 15-member board has a majority of members from developing countries. At its annual meeting, usually held in a nation in the Southern Hemisphere, board members, staff and administrators meet local partners and visit projects. Some loan recipients who have been with the society over many years have been invited to become shareholders.

Although no Oikocredit-financed projects were affected by the recent Asian tsunami, the continuing war in Ivory Coast and the economic crisis gripping Zimbabwe has created difficulty for some of the projects, Kibui said.

But she and Provance pointed to the generosity of people worldwide who have aided survivors. "Despite the growing rich-poor divide accelerated by globalization and the harsh impact poverty has around the world, Americans are eager to share their resources as a step toward greater equality and justice," Provance said.

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When the Society of Catholic Medical Missionaries, known as the Medical Mission Sisters, first invested in Oikocredit in 1980, they were not at all sure that it would work. "But we wanted to take a risk," said the society's district treasurer, Sr. Michaela Bank of Berlin.

The sisters' first installment was small, owing to the society's fragile financial situation, Bank told NCR in an e-mail interview. Today the Medical Mission Sisters are the largest Roman Catholic investor group in the ecumenical development bank.

The society chose Oikocredit--formerly called the Ecumenical Development Cooperative Society--because its loans went to people in the global South, especially women, who had no other access to credit.

The Medical Missionaries, whose generalate is in London and whose members do medical work and health education in 20 nations, had become critical of the power that the International Monetary Fund and the World Bank held on many of the countries where they worked, Bank said, and they had also come to see "the injustice of our monetary system."