OREANDA-NEWS. July 05, 2012. Since July 2011, GLS Bank has offered private investors in Germany a special savings account; these deposits are used to extend loans to the international cooperative Oikocredit. In this way, socially oriented savers have the possibility to invest in microfinance. Oikocredit grants loans from the deposits according to social-ecological principles to enterprises, credit unions and microfinance institutions in developing countries. The aim is to promote jobs and income as well as development in these countries. The savings account has a variable interest rate that is oriented on the German interest rate level and is protected under the German deposit insurance system.

"The first microfinance savings account met with great demand among GLS customers: After its successful introduction in January 2012 savings deposits already reached EUR 2.9 million," said GLS Management Board Spokesperson Thomas Jorberg. Oikocredit and GLS Bank expect further growth with a savings volume of EUR 13 million by mid 2014. In its guidelines GLS Bank defined an upper limit of EUR 3 million for uncollateralised loans. This limit also applies to deposits in the savings account which are forwarded in the form of a loan to Oikocredit. In order to avoid halting the unexpectedly high dynamic growth of the savings account, KfW secures the credit risk of GLS Bank vis-a-vis Oikocredit for a loan volume over the EUR 3 million limit with a guarantee of EUR 10 million over a term of five years.

"The greatly increased interest of private investors in the Oikocredit savings account at GLS Bank shows that the support of developing countries has growing importance for private investment. Products such as the savings account are increasingly coming out of nowhere and become interesting to a broad circle of investors. As one of the largest development financiers in the world KfW welcomes this development and is pleased to be able to support GLS Bank and Oikocredit as two pioneers in this segment," said Dr Norbert Kloppenburg, Member of the Executive Board of KfW.

Since its founding in 1975 Oikocredit has granted more than EUR 1 billion in loans and equity investments. Before deciding to finance a project, Oikocredit uses clear criteria to assess the social capacity, environmental compatibility and responsible corporate management of the affected project. The focus on the values of social responsibility is also reflected by participation in international initiatives, e.g. regarding customer protection in microfinance and financing of projects in fair trade.