Oikocredit was created for those economically disadvantaged groups who need loans to expand their businesses or start activities that allow them to achieve a better life, but do not have access to the conventional financial institutions.
We give loans instead of grants as we believe that loans are more effective for achieving economic productivity. Loans create a real business partnership based on mutual respect.
Our loans amount from € 50,000 to € 5 million, or its equivalent in local currency. In exceptional cases larger amounts may be lent.
Oikocredit's interest rates are reasonable and flexible, in line with the market rates on similar operations, and according to the project's risks and its relevance to the social development.
The average loan term is 6 years and depends on the type of project and its ability to repay. Grace periods depend on the type of project and its cash flow.
Payment schedules are flexible, adapted to the project's needs.
Oikocredit charges a commission of 1% on the disbursed amount, to be paid just once at disbursal.
The guarantees structure is defined together with the client, according to the type of loan and the organization's conditions. Mixed guarantees like contracts with clients, raw materials, products, first and second mortgages, securities, letters of guarantee, etc., are among the options.
Partners are selected in accordance with strict ethical and financial criteria, and we use a variety of social performance and impact assessment tools to monitor and support our partners to ensure that the impact reaches our target areas.
We provide credit lines which are generally shorter term, more flexible loan arrangements. For example, if a borrower requires working capital for a few months within a year.
Interest is paid only on the amounts drawn down at any one point. A 1% maintenance fee is paid on the total approved amount of the credit line.