Investing in Cooperatives. Florian Grohs, Director Loans & Investments Oikocredit Stockholm, 16 October 2012

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1 Investing in Cooperatives Florian Grohs, Director Loans & Investments Oikocredit Stockholm, 16 October 2012

2 Savings and Credit Cooperatives in Moldova

3 Savings and Credit Associations 2011 SCAs 369 Members 128,000 Short-term loans Loan portfolio 20 m Savings 5 m Admin. costs/sca 5,700 per year

4 SCA Gura Bicului, Moldova Manager Gheorghe Ciobanu

5 Farmer Nadejda Gori

6 Moldova: strengths and weaknesses Simple Democratic Women Low cost Local knowledge Social pressure for repayment Dependence on external financing Weak financial management Weak supervision and regulation

7 Oikocredit, an international cooperative A development finance cooperative Since 35 years members share the same social/ethical values 595 members from all over the world Active member participation Invest in Swedish Krones Oikocredit Spring Meeting 2012

8 1/3 of our 890 partners are cooperatives At 31 December Africa Central America and the Caribbean Asia South America Central and Eastern Europe 50

9 Our cooperative partners per sector At 31 December 2011 Coop partners per sector Financial service 181 Agriculture 84 Other 25

10 Githunguri Dairy Farmers Cooperative Small scale dairy farmer Average 3 acres, 5 cows

11 Farmers drop milk at collection point

12 Why Oikocredit funded the cooperative It was not able to get funding from commercial banks Own commitment together the farmers had already constructed buildings Social relevance 15,000 farmers Job creation Access to affordable pasteurized milk

13 Farm before.

14 Farm after

15 Githunguri Dairy cooperative is bankable Rapid growth 3 rd in market share in Nairobi Better service to farmers New products Currently over 15,000 members Annual turnover 46 million Over 200 direct jobs created

16 Success factors for this cooperative Fully owned by farmers Visionary leadership: competent chairman of the board and management Stores to distribute products Training for farmers Capacity building from or facilitated by Oikocredit

17 Cocovico, Cote d Ivoire Cocovico (Coopérative de Commerçantes du Vivrier de Cocody) founded 1993 by six market women in Abidjan

18 Cocovico the new market Cocovico since 2004 Partner of Oikocredit. Purpose: construction of market hall

19 Cocovico the old market

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22 Cocovico, Construction Costs: EUR 1.2 million (Francs CFA equivalent) Repaid: EUR Restructuring

23 Cooperatives: no panacea Democratic Open and Voluntary Broad ownership, members = owners Participatory Vulnerable to strong vested interests May lack professional skills; management not always responsible Conflict between members and management Slow decision-making process Easy to start / low cost Insufficient supervision and regulation

24 Cooperatives for development Overestimated Absolute failure Developed over many years Oriented towards members Solid management Locally rooted Part of a network Local people need their own model State should only create the legal framework

25 The cooperatives as means to remedy the distress of the rural population as well as of the urban craftsmen and workers. Friedrich Wilhelm Raiffeisen, 1866

26 Disclaimer This document was produced by Oikocredit, Ecumenical Development co-operative Society U.A. (Oikocredit International) with the greatest of care and to the best of its knowledge and belief at the time of writing. The opinions expressed in this document are those of Oikocredit International at the time of writing and are subject to change at any time without notice. Oikocredit International provides no guarantee with regard to its content and completeness and does not accept any liability for losses which might arise from making use of this information. This document is provided for information purposes only and is for the exclusive use of the recipient. It does not constitute an offer or a recommendation to buy or sell financial instruments or banking services and does not release the recipient from exercising his/her own judgment. The recipient is in particular recommended to check that the information provided is in line with his /her own circumstances with regard to any legal, regulator, tax or other consequences, if necessary with the help of a professional advisor. This document may not be reproduced either in part or in full without the written permission of Oikocredit International. It is expressly not intended for persons who, due to their nationality or place of residence, are not permitted access to such information under local law. Every investment involves risk, especially with regard to fluctuations in value and return. It should be noted that historical returns and financial market scenarios are no guarantee of future performance. Investments in foreign currencies involve the additional risk that the foreign currency might lose value against the investor s reference currency. Oikocredit International is a co-operative society with limited liability (coöperatieve vereniging met uitgesloten aansprakelijkheid) under the laws of the Kingdom of the Netherlands.

27 Thank you! Any questions?