Report of the board of directors

Oikocredit in 2006:

sustainable growth

The major highlights of the year 2006 took place

tracts for € 90 million in the same period last year.

within a time span of one week in October: the

This represents a 30% growth in amounts approved

first one of course was the news that the archi-

and no less than a 45% increase in the number of

tect of microcredit, professor Muhammad

contracts approved. Similar to last year, the bulk of

Yunus, had won the prestigious Nobel Peace

approvals, 87%, concerns loans for financial ser-

Prize. This is a fantastic recognition, not only

vices (including microfinance institutions) and non-

for professor Yunus and the Grameen Bank, but

microfinance institutions with 13%.

also for Oikocredit as a leading lender in the

sector, to further position our organisation as a

Disbursements over the past year has been as

unique player in this market in view of our

impressive as approval performance, with € 94 mil-

diversified approach: we finance both the larger

lion disbursed, an increase of 30% in value com-

and regulated microfinance institutions and

pared to the same period in 2005.

the smaller and weaker grassroots institutions.

Quality of portfolio; portfolio at risk decreases

It so happened that a few days after the Nobel

Prize Committee’s announcement we passed

The portfolio at risk ratio, interest overdue (both as

the € 100 million mark in approvals in 2006 with

percentages of the total portfolio at year-end) and

the approval of a loan of € 350,000 in local cur-

write-offs, show the following trends:

rency to the Community Development Centre.

This centre is a small microfinance institution

Portfolio at risk

in India, targeting poor women from a lower

cast. This loan pushed Oikocredit beyond the

as percentage of total development financing (end of year)

mark of € 100 million in approvals within one

year for the first time ever, reaching € 117 mil-

25

lion approvals in 2006.

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On behalf of the Oikocredit board of directors, we

hereby present the financial statements of the

Society for the year 2006. This report highlights

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the most important developments during the year.

The report will be presented for approval to the

Oikocredit annual general meeting in June 2007.

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Development financing

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Approvals and disbursals

Even though we emphasised consolidation in our

0

2006 plans in response to the rapid expansion in

2004

2005

2006

2003

2005, in particular in microfinance, our growth con-

Interest overdue %

Portfolio at risk %

tinues. This is because of both demand and supply

90 days

factors: on the one hand we grow with our micro-

Write-offs %

finance institution partners who demand larger

sums of funding. On the other hand we grow with

Portfolio at risk of the microfinance institution part

the increase in supply of services thanks to office

of the portfolio is much lower than that of other

strengthening and higher staff productivity. During

2006, we have approved 214 contracts for an

sectors and has improved from 7.7% in 2003 to

amount of € 117 million as compared to 148 con-

1.9% in 2006.

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