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INTERVIEW: An exchange between leaders

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27-06-2011

At the end of this week, Oikocredit bids farewell to Managing Director of ten years, Tor G Gull, and embarks on a new chapter with Rosalind Copisarow at the helm. Ms Copisarow and predecessor Mr Gull took a moment to discuss lessons learned, insights gained and the future of Oikocredit and development finance in general.

Tor G Gull (left) and Rosalind Copisarow

 

Rosalind Copisarow (RC): What are the biggest changes you’ve seen over the past ten years in the microfinance and social investment sectors?

Tor G Gull (TG): The enormous growth of awareness, interest and investments in microfinance has been overwhelming. A decade ago, few people knew about microfinance, but today almost everybody has heard of it and knows what it means to some extent. For Oikocredit, microfinance has been the main growth sector. A couple of years back the demand was so high we couldn’t deal with all the requests. During that period, microfinance attracted quite a number of purely commercial investors that again led to changes in the market, creating a more negative perception of the motivations of the industry. Despite that, I believe microfinance is here to stay. Undoubtedly, millions of people have been able to move out of poverty thanks to microfinance, especially during the last 6-7 years.

 

RC: What would you say were the biggest rewards as Managing Director?

TG: Meeting individuals who are grateful to Oikocredit for believing in them and providing a possibility for them to change their lives. During my travels, I’ve seen Oikocredit make a real difference with numerous people, projects and businesses able to get a loan or a capital injection. It has indirectly created jobs and income for people that would otherwise have little or no chance to move out of poverty.

 

RC: What advice would you give a new Managing Director of a social investor like Oikocredit?

TG: The most important advice is to be yourself and utilize your experience and your personality in your daily work. Secondly, I think it is important to focus on what we as Oikocredit are good at; namely providing finance for our target groups in the focus countries. Thirdly, Oikocredit must utilize its strength, the decentralized structure, on both the investor side and the financing side. By further delegating responsibilities and authority, but also accountability to staff members we can continue to grow, become more visible and thus have a greater influence on the world’s development agenda.

 

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TG: You have experience ranging from blue chip investments to start-up microfinance institutions. In your view, what has been the biggest contribution microfinance has made to global development?

RC: Microfinance offers a methodology to extend access to financial services to at least a billion people previously considered not worthy of credit. This cash flow support can tide them over the most difficult periods or it can enable them to engage in income generating opportunities otherwise out of reach. It may help them to build up long term assets, and participate in the development of larger facilities that benefit their entire community. When used in conjunction with other development tools, microfinance can be even more powerful in addressing the complex challenges the world’s poorest people face.

 

TG: What in particular about Oikocredit made you decide to apply for the position as Managing Director?

RC: I would highlight three of Oikocredit’s greatest attributes. Firstly, the integrity of following its mission in both policy and operation. Secondly, the strength of commitment and engagement from all investors and members, comprising a widespread cross section of society. Thirdly, the breadth of its mandate beyond microfinance – or any single form of support – to offer effective financial and capacity building services to the poor.

 

TG: What do you think the future of development financing looks like? How can it continue to contribute to the welfare of people living below the poverty line?

RC: To be truly effective, I believe development financing structures will need to become much more client-driven, with higher standards and more specialized expertise.The basis for setting interest rates on loans or rates of return on equity investments will have to shift to more of a value-for-money basis from the clients’ perspective, instead of a more supply-side orientation we see now. I would expect the importance of development financing to increase as the percentage ofpeople in need of such services also increases. Oikocredit has an important contribution to make in shaping the future of the development finance industry to the benefit of its clients.

 

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