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Oikocredit connects small-loan lenders with borrowers.
Oikocredit puts power in people's hands by David Cohn - 8.10.09
SEATTLE
In 2006, Muhammad Yunus turned the traditional lending theories upside down with his Nobel-winning work on microfinance. Today, many are concerned that the booming industry is growing too fast for its own good.
Two U.S. firms are teaming up to blend the power of social media with the power of microfinance loans to try and keep the social goals of microfinance in line with the financial ones and ensure beneficiaries reap the greatest returns.
About 1,200 microfinance institutions exist worldwide, representing 64 million borrowers and assets totaling $32 billion, according to the Centre for the Study of Financial Innovation. While microfinance was originally conceived to do social good, many lenders reported in a recent survey that financial concerns are now taking precedent over moral ones.
Oikocredit, one of the world’s leading lenders of working capital to microfinance institutions, measures its success not just by its financial accomplishments but also by how it aids and empowers poor communities.
“An investment in microfinance should focus on the social good that your money is doing, not the return you are receiving, ” says Renee Ledoux, an Oikocredit program manager. Oikocredit offers a “modest” financial return on investments and Ledoux notes that it can be frustrating to see the success of other microfinance organizations that are less restrained.
But the organization does report solid metrics on its social impact. This is the root of a new partnership with Re-Vision Labs, the Seattle-based social media for-profit focused on connecting organizations with their community and customers.
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