06546
October 25, 2006

Microfinance now successful way to combat poverty, says church ‘bank’

by Ecumenical News International

GENEVA — Oikocredit, an international church-supported microfinance institution, has approved more than 100 million Euro ($125.6 million) worth of credits in the first 10 months of 2006, a record, it said, in reaching out to poor people often excluded by the commercial banking sector.  
  
     At the same time, the Netherlands-based financial institution hailed the Nobel Peace Prize committee for awarding this year’s prize to Bangladesh economist Muhammad Yunus and his Grameen Bank for pioneering small loans to help overcome poverty.   
 
     ”We owe a great deal to Muhammad Yunus’ innovative work of the last three decades,” said Oikocredit managing director Tor G. Gull in an Oct. 24 statement. “Muhammad Yunus has given a new perspective on life to the 1.1 billion people that live on less than a dollar a day. Some 450 million of them have already been affected with small loans that help to build up their own sources of income and many more are yet to come.”  
 
     The most recent credit approval by Oikocredit was to a small microfinance organization in India, which aims at supporting women from a lower caste in the poor rural area of Tamil Nadu.  
 
     ”The credit analysis and the conditions of the loan approval of 350,000 euros ($439,000) are a perfect reflection of what Oikocredit strives for: reaching out to people and especially women,” noted the Amersfoort-based institution.  
 
     Oikocredit was originally set up as the Ecumenical Development Cooperative Society in 1975 by the Geneva-based World Council of Churches to offer a socially just means of investment.   
 
     Church treasurers were said at first to be skeptical, but Oikocredit has stated that no investor has lost capital. “Since 1975, Oikocredit’s credit for development model has moved in stakeholders’ mind from an unfathomable model to a successful tool contributing to alleviate poverty,” the institution noted. “And the demand for these credits continually increases.”