3612 Annual Review 06
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Finance for fair trade and support for disadvantaged producers Annual Review for the year ended 30 September 2006 Moderator’s statement Shared Interest is a part of a worldwide movement to promote fairer world trade. As we approach the 200th anniversary of the UK Parliament’s abolition of the slave trade it is sobering to reflect that slavery was for a long time regarded as an essential element of the economic process by which Britain prospered. We may have made slavery illegal, but tens of millions of people are still bound by the shackles of economic injustice. Shared Interest’s pioneering role in finance for fair trade is significant. The past year, our sixteenth trading year, has seen us pass some important milestones: members’ share capital topped £20 million for the first time; direct loans to producers doubled to £1.9 million (showing faster growth than our traditional lending to fair trade importers); we established a regional presence in Kenya and in Costa Rica; and the Shared Interest Foundation hosted its first producer training event. Growth in members’ capital is vital to support our aims to increase longer term loans to fair trade producers. Our regional presence helps us to identify potential borrowers, process loan applications more quickly and identify producers’ training requirements. Two years ago we began to invest in changes to make the Society more effective in supporting our investors and borrower customers. These new business developments are not yet complete and the trading results this year, a profit of £45,000 after share interest, fell slightly short of our plan. We are in the business of sharing lending risk so that producers can gain access to the credit they need. We assess the risk of each loan carefully but we need to ensure that Shared Interest makes an overall financial return sufficient to absorb the occasional bad debts which inevitably follow. In 2004/5 we commissioned our first social accounts and repeated the process in 2005/6. We are encouraged by the social impact which Shared Interest is already achieving and are challenged to become even more effective in reaching those whose lives can be transformed by fair trade. Our new Managing Director, Patricia Alexander, and her team have worked hard over the past year. On behalf of all members and customers I thank them for their energy and commitment, and also the Board and Council who serve the Society. Most of all I thank Shared Interest’s members for investing in a fairer world. Philip Angier, Board Moderator Shared Interest is the world’s leading fair trade finance organisation. Through Shared Interest, investors give some of the poorest communities in the world the financial backing to join the fair trade marketplace and trade their way out of poverty. Shared Interest Society is a co-operative lending society, owned and controlled by its members from across the UK and was established in 1990. The combined investments of members are used to provide much needed, accessible financial services to fair trade producer groups in developing countries. Shared Interest Foundation is the sister charity to the Society. Shared Interest Society and Shared Interest Foundation share a common vision. Our vision ... is to achieve real and lasting improvements to the lives of disadvantaged producers, particularly in poorer parts of the world, by providing fair and just financial services and sharing risk. Shared Interest Society’s mission ... is to finance fair trade. We do this by: • Lending to and working with producer and buyer organisations which are committed to using fair trade principles • Promoting a North-South partnership: enabling members in the UK to share risk and take positive action to direct funds to borrowers working in poorer parts of the world listening to and promoting southern voices and views • Strengthening the fair trade movement so that it continues to present a more just model of trade. Shared Interest Foundation’s mission ... is to support disadvantaged producer groups in using fair trade as a sustainable solution to poverty. We do this by: • Providing education and training, particularly in business and financial management • Developing capacity within producer organisations and assisting them in improving their business performance • Widening access to fair finance • Supporting the development of the fair trade movement • Improving and developing the social impact of Shared Interest. Fair financing across the world We are celebrating a successful year of working with customers in some of the world’s poorest countries. Our plan to bring our business closer to the people who can benefit most has worked very well, with the offices we opened in East Africa and Central America contributing effectively to a large increase in lending. We extended our list of customers by 13 during 2006 and made a substantial impact on the work of a total of 56 producer organisations and 39 of their buyers. As a result our lending rose by £1.9 million, enabling the advantages of fair trade to be delivered to a growing number of communities. It was especially significant for our strategy to deliver more to impoverished communities that more than £900,000 of our increased lending was made directly to producer groups. Speciality Foods of Africa, Zimbabwe, a new customer in 2006. Photo ©PhyoTrade Africa. Visits to producer groups such as Thai Tribal Crafts are included in ‘Meet Membership boost for fair finance the People Tours’. Photo courtesy of Traidcraft The increase in our lending in the developing world has been mirrored by significant growth in members’ share capital, which rose by 7% to £20.5 million by the year end. This growth is the result both of attracting 336 new members, who invested £600,000, and of increased investments by existing members, including an inflow of £594,000 from conversion of the Loan Stock issue which matured in 2006. At 30 September 2006, the number of members stood at more than 8,400. In order to meet our ambitious plans to grow investment, we launched the Shared Interest Ambassador scheme in January. We would like to thank the 49 people who had volunteered by the end of the financial year to promote our work, fair finance and the fair trade movement in their communities. Their work has already had an important impact in widening awareness of what we offer to a larger audience through attendance at events organised by ourselves or by local fair trade partners. Shared Interest’s customers include the Coopercañera-Cooperativa Cancra Costa Rica Much in Little following organisations. We also send Craft Aid (Mauritius) Mauritius Mysha Enterprises payments to nearly 400 producer groups on Dezign Incorporated Zimbabwe NAWOU - Nat’ Ass’n of Wo behalf of fair trade buyers. ELOC Farms Ghana Organisations Uganda Fruits of the Nile Uganda North Western Bee Produc PRODUCER GROUPS Frutos de los Andes Fruandes Colombia Panay Fair Trade Center Alternative Trade Network Nigeria (ATNN) Nigeria Fundacion Solidaridad Talleres Artesonales Chile Proagroin APICOOP Valdivia Cooperativa Gebana Afrique Burkina Faso Productores de Miel Flor d Campesina Apicola Chile Gebana Brasil Brazil Rungwe Smallholders Tea APRAINORES El Salvador Getrade Ghana Association Arum Dali Mekar Indonesia Grupo Agricola Prieto Ecuador Salay Handmade Paper Ind Asociacion De Artesanos Qantati Bolivia Gumutindo Coffee Cooperative Enterprises Uganda Smolart Self Help Group CACVRA Peru Holyland Handicrafts Palestine Speciality Foods of Africa Camari Fepp Ecuador Honey Care Africa Kenya Thai Tribal Crafts Candela Peru Intercrafts Peru Peru Trinity Jewellery CECOCAFEN Nicaragua Jirmit Papyrus Group Egypt UCRAPROBEX COCLA Peru Kisii Soapstone Carvers Cooperative Society Kenya Undugu Society Centro de Exportaciones Kisii Soapstone Art & Craft Kenya Volta River Estates Gruppo Salinas Ecuador La Alianza Costa Rica Wupperthal Rooibostee Ko Cercle des Secheurs Burkina Faso Lombok Pottery Centre Indonesia Xochipilli A. C.y Xochiquetz Comparte Chile Machakos District Cooperative Union Kenya Yatta South Women Group Coocafe Costa Rica MCCH – Fundacion Maquita Cushunchic Ecuador Yayasan Mitra Bali Philippines BUYER ORGANISATIONS Magasins du Monde Oxfam Belgium Ghana Cafédirect UK One World Shop UK men’s Citizen Dream Belgium Oxfam Australia Trading Australia Uganda Commercio Alternativo Italy Oxfam Wereldwinkels Verdeelcentrum Belgium ts Zambia Contigo Germany PointOV UK Philippines CTM Altromercato Italy Rattvis Handel Import Sweden Costa Rica Dritte Welt Partner Germany Red Tomato USA e Campanilla Mexico Ecco Bella USA Roba dell’altro Mondo Italy Growers El Puente Germany SERRV International USA Tanzania Epona UK Solidar’Monde France dustries Philippines Equal Exchange USA Ten Thousand Villages Canada Canada Kenya Equal Exchange Trading UK Ten Thousand Villages USA USA Zimbabwe Equoland Italy Top QualiTea (UK) UK Thailand EZA Dritte Welt Austria Trade Aid Importers New Zealand Kenya F M Foods (Tropical Wholefoods) UK Traidcraft UK El Salvador Fair Trade Company (People Tree) Japan Tropical Forest Products UK Kenya Fairwind UK Twin Trading UK Ghana Gepa Fair Handelshaus Germany World of Good USA mitee South Africa IDEAS Spain al Kenya Just Us! Coffee Canada Kenya La Siembra Canada Indonesia Liberomondo Italy Reaching out to our customers The opening of offices in Kenya and Costa Rica was instrumental in driving forward the business’ growth as Shared Interest staff in-country developed closer working relationships with customers, potential customers and wider networks of people