Building sustainable social impact: interview with Oikocredit’s Capacity Building Manager

Capacity building is vital for effective impact investing, yet its importance is often overlooked. It ensures that the organisations and communities receiving investments are well-equipped to manage and implement projects that generate sustainable social, environmental, and financial outcomes. 

Empowering local partners for sustainable impact 

By strengthening the skills of Oikocredit’s local partners, capacity building enhances their ability to manage resources effectively, implement projects successfully, and make informed decisions that align with impact goals. 

Supporting the development of Oikocredit’s partners, particularly in underserved regions, helps create long-term solutions rather than fostering dependency on external aid. This ensures that initiatives remain viable beyond the initial investment. 

Reducing risks and enhancing returns through capacity building 

When recipients of impact investments are well-trained and knowledgeable, the risks associated with mismanagement or inefficiency are significantly reduced. This leads to stronger financial returns and a greater social impact. 

In this interview, we speak with Barbara Rademaker, Capacity Building Manager at Oikocredit, about her approach to empowering organisations and driving lasting impact. 

How long have you worked at Oikocredit, and what did you do in previous roles? 

I started at Oikocredit in January 2021, during the height of Covid-19, but my journey in impact work began much earlier. In 2004, I moved from the Netherlands to Bolivia which marked the beginning of my involvement in poverty alleviation work. My work involved supporting smallholder farmers at a local NGO specialising in bio-trade. 

In 2011, I moved to Peru and entered the impact investing world as an investment officer. That’s where I really saw how access to finance could create tangible impact. But I also realised that loans and equity alone weren’t enough – organisations needed support to enhance their performance across multiple aspects. 

What does capacity building involve? 

Capacity building is giving organisations the tools, skills and support they need to become more resilient and effective, beyond just providing money. It focuses on the needs of the organisation – our partners – and what they need to operate more efficiently, grow sustainably, increase their social and environmental impact and better serve their communities. 

At Oikocredit, we focus on strengthening our partners’ ability to enhance their performance – not just financially, but also socially and environmentally. This can involve helping with business skills such as financial management or marketing, providing technical expertise, such as improving sustainable farming practices, or organisational development such as governance and leadership training.  

Through our capacity building programmes, we provide training programmes, facilitate peer learning and support technology adoption to adapt to climate change challenges. 

How do you identify and select partner organisations for capacity building support? 

The process typically begins with Oikocredit’s investment team. Our investment officers have strong relationships with partners and often identify initial capacity building needs. They refer the organisation to us, and we develop the project idea. 

What makes Oikocredit unique is that we also work with organisations outside our investment portfolio. Our mandate includes strengthening businesses in the sectors we invest in as a way of further unlocking the investability of these sectors, so we support non-partner organisations too. 

Could you share some specific examples of capacity building at Oikocredit? 

One compelling example of capacity building is a programme we’re involved in, which helps family-owned SMEs with governance and succession planning. When these businesses struggle with succession, it can impact entire supply chains, including smallholder farmers who depend on them. 

Many SMEs face challenges like informal decision-making and key person risk, which involves the concentration of decision-making by one person, often the founder. And the subject of succession planning can be sensitive or even taboo in some families. This can create a significant risk factor for investors. 

We work with Strathmore University to help these organisations craft a succession plan for their business and establish a clear family business constitution. As part of this Regional Small Technical Assistance Initiative, 18 family-owned businesses have enrolled in a Family Business Executive programme at the Strathmore University Business School in Nairobi. The programme consists of a 5-day course, followed by a six-month coaching programme per family with monthly on-site coaching sessions. 

It’s not just about training – it’s about having coaches who can sit down with families and work through difficult conversations about who will manage the business and how profits will be divided. It’s also nice to work with a local university with ample experience in this issue. They understand the local context and culture better than anyone. We prefer using local consultants whenever possible. We only bring in international experts when specific expertise is unavailable locally. In such cases, we connect them with local consultants to provide knowledge transfer and make sure the content is adapted to the local context. 

We’re also part of a programme called SSNUP. This 10-year, €55 million programme is aimed at strengthening smallholder farmers and agricultural value chains in sub-Saharan-Africa, Latin America and Asia. The idea is to provide technical assistance and promote sustainable farming practices to improve resilience and productivity for up to 10 million smallholder farmers. 

How do you measure and track the impact of capacity building initiatives? 

Measuring success in capacity building requires patience and nuance. It’s not about quick wins or tick-box exercises. While we track ESG scores, real improvement takes time. What’s crucial is ensuring knowledge is transferred and absorbed by the partner organisation. 

To promote this, we try to put the partners in the driver’s seat. The projects should be led and owned by them. But we are critical about defining and monitoring  key objectives and milestones. We also require partners to co-invest in capacity building, both financially and with their human resources. We’ve seen how this shared commitment leads to better outcomes. 

What role does peer learning play in Oikocredit’s capacity building approach? 

We believe peer-to-peer learning is one of the most effective capacity building approaches. We’ve seen great results when partners learn directly from each other through site visits and knowledge sharing. 

Our partner Farmerline, an agri-tech business based in Ghana, has developed software that turns farmers’ mobile phones into smart information hubs. The digital platform provides information on climate-smart practices, market prices, marketplace services and local weather. After visiting Farmerline and seeing its technology in action, another partner has implemented similar solutions in its own organisation. 

How do you ensure capacity building aligns with Oikocredit’s impact objectives and investment strategy? 

The integration of capacity building with our investment strategy is an ongoing focus. Our investment officers are extremely motivated to support their partners, and many capacity building projects originate from their insights. The challenge isn’t motivation – it’s about finding the best ways to translate needs into effective projects. 

What emerging trends or challenges do you see for the future? 

Climate change is definitely the most pressing challenge facing Oikocredit’s partners. We’re particularly focused on climate adaptation. While everyone talks about mitigation, our partners are dealing with immediate impacts – floods, droughts and rising input costs due to climate-related supply chain disruptions. 

These challenges are interconnected with broader market dynamics. For example, changes in coffee purchasing patterns can affect entire value chains. When major coffee-producing regions experience a frost, prices increase for our partners. This results in increased financing needs for our partners due to the rise in purchase prices from the farmers. Cooperatives also struggle with financing gaps between harvest and delayed contracts.  

Political shifts also affect capacity building work. Changes in government priorities, both in developed and emerging markets, impact available funding for development initiatives. We’re operating in an increasingly complex environment where climate change, political shifts and market dynamics all intersect. 

We need to keep it simple and focused on our core role – supporting partners through changing circumstances. While we can’t solve every challenge, we can help organisations build resilience and adapt to an evolving landscape. 

Do you want to make a difference? 

Are you an individual or institution looking to make a difference by investing in low-income people and communities? Do you want more information about Oikocredit? Would you like to receive our newsletter? 

By investing in Oikocredit, you help create opportunities for low-income people in over 30 countries. That’s investing in people and generating real social impact. 

Because money has the power to transform the world!