The idea of Oikocredit starts at a 1968 meeting of the World Council of Churches. With major world unrest over issues including South Africa's Apartheid and the Vietnam War, church members from a variety of denominations called for an ethical investment channel to assure their funds would support peace, positive development and universal brotherhood.
In response to this, the Oikocredit Ecumenical Development Cooperative Society (EDCS) was founded in 1975.The concept was innovative: churches and church realted organizations' investments would provide credit to enterprises that support the disadvantaged. Although the concept of loans instead of charity was controversial for some, the wheels of Ecumenical Development Cooperative Society (then, EDCS) began to turn.
In EDCS’s (Oikocredit) first decade, the organization faced difficulties as it tried to gather enough church investments to begin its operations; but the idea of lending to organizations which helped the poor gradually gained support, and by the end of the decade, EDCS had invested in its first projects: one in India, and one in Ecuador. Oikocredit still operates in both countries today.
EDCS makes many advances in the 80s, extending investment opportunities to individuals and turning over its first operating profit. By the end of the decade, EDCS has paid out its first dividend to investors and approved its 100th loan.
The 90s mark EDCS's first fair trade loan. A new managing director takes the reins in 1994. The Asian Financial Crisis strikes, putting serious economic pressure on the region, but EDCS is still able to pay out a dividend to investors.
In the 00s, Tor G. Gull steps in as managing director. The UN adopts the Millennium Development Goals, which include many of Oikocredit’s aims such as gender equality and poverty reduction. The close of the decade sees Oikocredit awarded CGAP’s social performance award for transparency and innovation: a major industry honour.
During the last few years, the growing sector attracts stakeholders with varying motivations. Reports of abusive collection practices in microfinance institutions and over-indebtedness of clients highlight the importance of selecting the right partners, particularly in the Indian state of Andhra Pradesh. These challenges highlight Oikocredit’s mission: to ensure the poor can gain access to safe, financial instruments to build a better life. Oikocredit works closely with the sector to ensure investors cooperate to reinforce the priority of social change.