The cash injection will be used to help support People Tree's growing wholesale business with more advance payments to suppliers. People Tree's order books doubled last year.
Founder Safia Minney said it had taken her three years to find a suitable investor and added that venture capitalists wanted an unrealistic return on the business.
Minney said: "People Tree is a mission-driven company so we became exhausted during the search for investment as conventional venture capitalists wanted an unrealistic return and philanthropists just don’t understand fair trade businesses, which constantly invest in their producer groups and are campaigning on fair trade issues but are not charities. We are delighted to have Oikocredit on board as a long term strategic partner."
Whistles' chief executive Jane Shepherdson sits on People Tree’s board of directors.