C-SocPhil hosts Responsible Microfinance Luncheon with Oikocredit USA
Tellus Institute roundtable tackles controversies in international microcredit
BOSTON — The Center for Social Philanthropy at Tellus Institute and Oikocredit USA co-hosted a lunch meeting today with leading Boston-area impact investors to discuss controversies and challenges in the rapidly changing microfinance field.
The meeting provided an opportunity to introduce Oikocredit USA’s new National Director Sharlene Brown to the Boston impact investing community. Sharlene comes to Oikocredit USA after working with leading social finance organizations such as Domini Social Investments, US SIF - The Forum for Sustainable and Responsible Investment (formerly known as the Social Investment Forum), and Grameen Foundation, and she arrives at a time of organizational transition ahead of the anticipated retirement of its current Executive Director Terry Provance in 2012.
Brown and Provance joined C-SocPhil director Joshua Humphreys in leading the discussion. Dr. Humphreys provided a broad critical perspective on microfinance and the globalization of subprime lending, while Provance and Brown provided insights into recent controversies that have plagued specific microfinance organizations in India, Bangladesh, Mexico and Nicaragua, based on their long-standing work with partners in the field. Repeatedly they stressed the challenges faced by microfinance organizations and investment vehicles to remain true to their central mission of fighting poverty when profit-maximizing investors continue to commit capital to the field. Brown also provided insight into the kinds of questions that investment advisers should be asking as they begin to seek responsible investment opportunities in the space.
Clearly, there remains a critical role for mission-driven philanthropic and responsible impact investors to engage with microfinance institutions and investment vehicles in order to ensure that poverty alleviation and social empowerment remain central to the industry and thoroughly reflected in lending practices.
Investment advisers and analysts, portfolio managers, and other trustees and officers from groups such as Accion International, Ballentine Partners, First Affirmative Financial Network, the Harvard Initiative for Responsible Investment, Kiva, Oxfam, Rainbow Solutions, Springcreek Global Investments, the Sustainability Group at Loring, Wolcott, and Coolidge, The Philanthropic Initiative’s Center for Applied Philanthropy, Trillium Asset Management, the Unitarian Universalist Service Committee, US Trust, Veris Wealth Partners, and Zevin Asset Management joined in a wide-ranging, frank discussion about default rates, asset building and asset stripping, governance challenges, usury, currency and credit risk management, due diligence, gender dynamics, commercialization and securitization problems, and emerging innovation opportunities in areas such as mobile banking, credit reporting and rating, and new transparency standards for the industry.
For more information about the event or about C-SocPhil’s work on microfinance and other forms of impact investing, contact Josh Humphreys at jh@socialphilanthropy.org or (617) 575-9660.
ABOUT THE CENTER FOR SOCIAL PHILANTHROPY
The Center for Social Philanthropy (C-SocPhil) is an innovative, nonprofit social enterprise working on the frontiers of philanthropy and finance. We provide data, research, resources and tools to help foundations, donors, and other mission-driven investors leverage their assets more fully for long-term, sustainable social and environmental impact. The Center is housed at Tellus Institute, a think tank in Boston pursuing a Great Transition to a more just, sustainable and equitable global civilization.
ABOUT OIKOCREDIT USA
Founded in 1975, Oikocredit is an international cooperative microfinance investment vehicle that seeks to empower the poor with credit. Today, Oikocredit is one of the world’s largest sources of private funding to the microfinance sector and a provider of credit to trade cooperatives, fair trade organizations and small-to-medium enterprises (SMEs) in the developing world. Oikocredit promotes global justice by empowering disadvantaged people with credit. It reaches more than 28 million people through 875 partners in 71 countries.
As a responsible investor, Oikocredit supports the adoption of client protection and transparent pricing principles, and encourages poverty assessment by its investees and project partners. In recognition of its strong commitment to environmental, social, and governance (ESG) standards, Oikocredit was awarded CGAP’s inaugural ESG award in October 2010. In 2011, Oikocredit joined the United Nations Principles for Investors in Inclusive Finance as an inaugural signatory, reaffirming its commitment to expanding access to affordable and responsible financial products and services for poor and vulnerable populations.
