Oikocredit paves way for new capital-raising model

October 31 | 2022

Under the new model, Oikocredit would issue participations instead of shares. Canadian investors would see their existing investments transferred to the new model in two phases.

Until 2020, investors in Canada were able to invest indirectly in OIKOCREDIT, Ecumenical Development Cooperative Society U.A. (Oikocredit) through Stichting Oikocredit International Share Foundation (OISF). OISF is a member of Oikocredit. It holds shares in Oikocredit and issued depository receipts for those shares to investors in Canada. OISF ceased its offer in Canada in late 2020 but continues to serve existing investors. The introduction of the new capital-raising model will lead to changes for those existing investors. Oikocredit plans to introduce this new model once the required responses from regulators have been received. New investments are unfortunately not possible.

Implementation to take place in two phases in 2023

The new model is expected to be rolled out in two phases in 2023. In the first phase, expected to start as of 1 January 2023, Oikocredit will convert outstanding member shares to participations. Participations are non-voting equity instruments and are materially similar in financial terms to the current shares and depository receipts issued for shares (for more details, see the table below). From this date on, the underlying product of all depository receipts held by existing Canadian investors will be a participation instead of a member share.

In the second phase, expected to be in effect as of 1 April 2023, all depository receipts will be exchanged for participations and all existing Canadian investors will have a direct investment in Oikocredit. Investors don’t have to take any actions to convert or exchange their depository receipts.

If investors disagree with the aforementioned changes, they can request a redemption of their investment. To request a redemption, investors should complete and return a redemption form (organization redemption form or individual redemption form).

New model expected to unify Oikocredit’s work and increase its impact

Participations are intended to eventually replace the shares issued by the cooperative, the depository receipts offered by OISF and the other investment products that Oikocredit's support associations offer in other countries. This will allow Oikocredit to simplify its investment offer and enable it to invest more resources in partnerships and projects that benefit low-income communities, as well as in promoting sustainable development together with its global network of investors, members and partners.

Mirjam ‘t Lam, Managing Director, Oikocredit, said: “Oikocredit’s dedication to its mission of social impact will continue unaltered by the new capital-raising model. Investors can expect the same focus on creating impact with their money while experiencing a smooth transition to the new model.”

Changes conditional on regulatory processes

The possibility to offer participations was approved by Oikocredit’s members at an Extraordinary General Meeting held on 14 October 2022 in Amersfoort, the Netherlands. Oikocredit plans to introduce this new model once the required responses from regulators have been received. It expects to receive these by the end of the year and will share more details about the planned changes with OISF investors, including amended terms and conditions for OISF depository receipts.

Investors can read more about the new model below.

Comparison of key features of the current depository receipts and the participations

	Depository receipts (current product)	Participations (new product)
Issuer	Stichting Oikocredit International Share Foundation (OISF), based in Amersfoort, the Netherlands.	OIKOCREDIT, Ecumenical Development Cooperative Society U.A. (Oikocredit), based in Amersfoort, the Netherlands.
Type of investment	Non-voting depository receipt issued by OISF for a share issued by Oikocredit.	Non-voting equity instrument issued by Oikocredit, called a participation.
Minimum investment	One depository receipt.	One participation.
Redemption Price	Nominal value (EUR 200, CAD 200) or net asset value (NAV), whichever is lower. This means that the redemption price cannot exceed EUR 200 or CAD 200, but can be lower.	Same as for depository receipts. It has been made explicit in the participation terms how the NAV in foreign currencies is calculated should the net asset value fall below the nominal value.
Dividend	As decided by Oikocredit’s members at the annual general meeting. Past dividend levels have included 2%, 1% and 0.5%. There have also been years in which no dividend has been paid.	Same as for depository receipts.
Costs for investment administration	Allowed in principle, but none are in place.	Allowed in principle, but none are in place.
Risks of continuing to hold depository receipts	An investment in depository receipts carries financial risks typical for an investment in the equity of a company. An investment is fundamentally associated with considerable risks and can lead to the complete loss of the invested capital. Oikocredit seeks to protect the capital of the investors through careful business decisions and diligent provisioning for expected losses, although a residual risk can never be completely ruled out. Since Oikocredit began in 1975, no investor has lost any of their capital. However, past performance is not a guarantee of future results. Please note that the depository receipts are no longer available for sale to, or subscription by, (prospective) investors in Canada. For further information, click here.	The risk profile is the same as for depository receipts. Please note that participations will not be available for sale to, or subscription by, (prospective) investors in Canada.
Redemption	You can submit a redemption order by filling in a redemption form at any time to request your money back. Redemption requests are processed on a monthly basis. Investment redemptions are always at Oikocredit’s discretion.	As is the case with depository receipts, you can submit a request for redemption, redemptions are processed on a monthly basis and are always at the discretion of Oikocredit. In addition, Oikocredit can also decide to redeem in case an investor no longer meets the eligibility requirements or holds less than one participation.

« Back

Choose your location

Europe

North America

Is your country not on the list?

Oikocredit paves way for new capital-raising model