Oikocredit uses its investors' money to dispense
life-changing loans to marginalised people in developing countriesIf you like the sound of an ethical investment that helps disadvantaged people around the world and also provides a "modest" financial return – typically 2% a year – you might want to look at Oikocredit, an international co-operative trying to raise its UK profile.Based in the Netherlands, Oikocredit began as a faith-based initiative – it was set up in 1975 to allow churches to lend money to marginalised people in developing countries – but says its church-based roots do not affect the investment decisions it makes.Oikocredit lends its investors' money to microfinance institutions all over the world and, in turn, they dispense "life-changing" loans in countries such as Guatemala, India and Uganda, with an emphasis on rural areas and women. Your money could help someone become self-employed or expand their business, or it might finance a fair trade venture.For example, Oikocredit supported the Cocovico women's market (pictured left) in Abidjan, Ivory Coast. This was established in 2008 by a group of women vendors, including those from Zuenoula village (right), as a venue to sell their produce without paying extortionate fees.Oikocredit works with partner organisations in 70 countries, and has a UK office in Garstang, near Preston, Lancashire.UK individuals and organisations such as charities can invest by buying "depository receipts". These give them the financial rights of an Oikocredit co-operative shareholder without direct membership.Minimum investment is £150. There is no fixed term – you can request repayment of your money at any time, though the organisation hopes those who sign up will view it as a long-term investment.There are risks associated with this type of investment, so you could end up getting back less than you paid in. However, shares in Oikocredit have held their value since it was founded, says a spokesman.Crucially, Oikocredit is not regulated by the UK Financial Services Authority, and investments are not protected by any investor compensation scheme.Investors get a maximum 2% dividend, paid once a year. This has been paid every year since 1989, bar two years when it was 1%.A spokesman says: "The fact that we limit our dividend to this modest level enables us to charge reasonable interest rates on our loans and to extend credit to partners with a higher-than-average risk profile."Click here for more information.Ethical moneyAlternative investmentsInvestmentsBanks and building societiesConsumer affairsRupert Jonesguardian.co.uk © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds
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