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Oikocredit promotes investing in people

The conference’s Global Ministries Committee
encourages education about Oikocredit
as an investment option for individuals and congregations.

Believing that economic and social justice will promote peace, Terry Provance, director of Oikocredit, said the organization promotes investments in microcredit opportunities for people around the globe. 

terry provance
Terry Provance

He told about the 34-year-old organization founded by World Council of Churches at several PNC congregations and at the Annual Meeting in April.

The Global Ministries Committee, which arranged for his visit, is discussing investing part of funds designated for conference global ministries.

Terry described how four years ago, a Filipino woman would send her four children aged two to nine years old from their peasant shack out to the dirty streets of Manila to beg for eight hours.  Her husband was too ill to work.  They survived on $1.40 a day.

“Their situation is like 1.4 billion people in Asia and the Pacific,” said Terry.

Now she has opened an open-air store.  Even though she is not literate and could not qualify for a bank loan because she has no assets or collateral, she was able to receive a microcredit loan of $35.  She bought an old sewing machine and makes slippers.

She goes to town, throws out a sheet and people buy what she makes.  Her family eats twice a day and her husband has gone to a doctor.  The children have books and clothes, so they can go to school.  She also paid to repair their roof. 

She paid back the first loan, and qualified for a second loan of $100.  She used it to hire two sisters and a friend to help her sew things.

“Oikocredit makes $28 billion in microcredit loans available to 110 million women in the world to help them improve the quality of their lives through barefoot capitalism,” he said.  “It’s a first step out of poverty.  We don’t romanticize their lives, but it’s a step to reduce the global poverty of 3.4 billion of the world’s 6.6 billion people who live on less than $2 a day.  To alleviate poverty for 3.4 billion people would take $300 billion.

The loans go to women, Terry said, because “women keep their word and pay back if they promise they will pay.  Money women earn goes for their family’s needs.  Only 30 percent of money paid to men goes to their families, he said.

“The poor are reliable borrowers.  They participate in their own livelihoods and keep money coming in to pay loans.  With every $1 loan, we receive 98 percent back, because people do not want to risk losing their livelihoods and because of peer pressure.  In the United States, the payback rate on loans is 89 cents on the dollar,” Terry said.

Its possible because Oikocredit is nonprofit, keeping costs low and offering below market rates to investors—2 percent.  The investor knows where the money goes and has a “high social reward,” he said.

The 2008 Oikocredit investors have their money, in contrast with 30 to 50 percent losses by Wall Street investors.

“It’s not a donation, because the investor receives the principle back, he said.  “We are asking people in the North to loan money to invest it in a socially responsible business contract that lifts people out of poverty.”

Oikocredit, based in the Netherlands, has 32,000 investors. It does not make loans in the United States or Europe, because of the acuity of poverty in Asia, Africa and Latin America.

The name Oikocredit for the Economic Development Cooperative Society comes from the Greek word, “oikos,” for household—economy, ecology and ecumenism—and the Latin word, “credaire,.” which means to believe.

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Copyright © September 2009 - Pacific Northwest United Church of Christ Conference News

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