Qr 91 by Shared Interest

QUARTERLY RETURN 91 Spring 2014

25 YEARS OF ETHICAL INVESTMENT

HELPING WINE FLOW FROM CHILE

CLIMBING NEW HEIGHTS with COFFEE

Introduce a friend and help us reach our goals

Diversifying our fresh fruit portfolio

Fresh ideas from our coffee customers

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page 05

page 10

Welcome

Our Spring issue of QR always comes to you during our busiest time of year, and these first few months of 2014 have been particularly rewarding.

We are delighted to have seen the highest turnout on record for our AGM in March. Many of you took the time to submit your voting papers, and we are pleased to welcome in our new Board Member, Paul Chandler, alongside Council Member, Ashley Wyatt. It was an honour to be able to introduce our AGM delegates to Catherine and Nouason from Kenyan handcraft group, Namayiana. They spent a week with the Shared Interest team, culminating in their visit to London. They produced nearly 100 items of jewellery designed by girls from Central Newcastle High School for Girls, and were received at the school by pupils and parents for a photography and jewellery exhibition of their work. As usual at this point in the year, we have spent some valuable time with our overseas team. We are working hard to ensure they are resourced to identify and support new customers, and to introduce Shared Interest Society as a viable option to farmers and producers around the world. I am pleased to provide you with an update on matters relating to the Co-operative Bank, following continued news coverage of developments. As always, we are delighted to introduce you to some of our new customers, and to provide updates on the impact of our finance across our portfolio of products and producers. January saw the highest net flow (investments minus withdrawals) for Shared Interest. We have opened a record 164 new accounts since the beginning of 2014, all of which are a valuable step towards our 25 year anniversary goals, which we explain later in this issue. And as of 6 April 2014, the amount our members are able to invest has increased from £20,000 to £100,000. Thank you for your continued support.

Patricia Alexander, Managing Director

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Front cover photo: coffee farmer in Mexico, see page 11

CO-OPERATIVE

BANK UPDATE The Board of Shared Interest remains concerned but was encouraged by the Co-operative Bank’s process of recapitalisation just before Christmas. The Bank’s position is still developing and at the time of going to print, with this issue, the Bank has yet to publish its 2013 financial results. The Society is now carefully considering options in regard to our optimal banking partner. On the one hand the fact that the Co-operative Bank is no longer controlled by a mutual organisation reduces its long‑standing fit with Shared Interest. We do note however, the strong intention now enshrined in the Bank’s new Articles of Association, that: “The Company shall… promote and conduct its business to the extent practicable in a manner informed by the established values of the cooperative movement, having regard to the highest standards of ethical principles and with the aim of being recognised as a good corporate citizen and contributing to building a stronger and sustainable society.” Our ideal banking partner would combine very strong ethics with financial security and attractive pricing. We will, of course, have to accept a degree of compromise in some areas and look for the optimal arrangement. Whilst we consider the options – including the emerging performance of the Co-operative Bank in its new ownership and whether the Bank wishes to continue working with us – we can reassure members that we are continuing to hold some funds completely outside the Co-operative Bank, in order to reduce dependence on one organisation and the financial risks of holding all of our Share Capital with one bank.

2014: HIGHLIGHTS TO DATE We have reached some significant milestones in the last quarter: • 520 enquiries this year to date - over double received for the same period last year • 66 events attended since October 2013 • A record 164 new accounts opened since the beginning of 2014 • We are very close to reaching Share Capital of £30m JANUARY: • Highest net flow (investments minus withdrawals) in 10 years MARCH: • 60 new members in March, the highest ever number of new members in one month • Largest ever turnout at our AGM APRIL: • Member investment limit raised from £20,000 to £100,000

25 YEARS OF ETHICAL INVESTMENT

BE AN INVESTOR: AND SHARE IN A FAIRER WORLD To celebrate our 25 year Anniversary we are launching a campaign to increase membership and investment. Our goal is to increase membership to 10,000 investors, and to increase Share Capital to £33 million by 2015. In order to achieve this we need approximately 1,450 new members and £3,150,000 in new investment.

To give you an idea of what this means: If 1 in 6 members encouraged a friend to invest we would reach our goal of 10,000 members.

for 2015

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INVESTMENT LIMIT INCREASEd TO £100,000 from 6 April The Co-operative and Community Benefit Societies Act 2014 will come in to law later this year. This replaces the Industrial and Provident Societies Acts. As part of this change the upper investment limit for the Society increased from £20,000 to £100,000 on 6 April 2014 which we hope will encourage people to invest more. If you have any questions about the limit change, please do not hesitate to contact us on 0191 233 9102 or email membership@shared-interest.com QR91 03

FAIRTRADE

FORTNIGHT 2014 Fairtrade Fortnight this year marked the launch of a campaign that aimed to transform the banana industry. Make Bananas Fair focused on those at the sharp end of the supply chain; the millions of struggling banana farmers and workers. Fairtrade Foundation highlighted that there is still a serious problem at the heart of the banana trade. Their campaign profiled Foncho, a banana farmer from Columbia, and explained that while exports have grown, farmer earnings have reduced. While the cost of producing bananas has doubled, the cost to the consumer has halved. Ensuring a fair price for bananas helps ensure farmers and workers feed, clothe, educate, and provide healthcare to their families. 18,000 petitions were submitted in support of the Fairtrade Foundation’s Make Bananas Fair campaign. You can still sign the petition at foncho.fairtrade.org.uk. Shared Interest staff and ambassadors were involved in over 30 events during the fortnight. Thanks to all of our ambassadors who set up stalls and delivered presentations to promote Share Accounts to potential new members. Marketing and Communications Officer, Laura Carrick, ran Newcastle parkrun dressed as a Fairtrade banana, while other staff gave out Cafédirect tea bags to participants and spectators with details of how to invest in fair finance.

Other upcoming events: Glasgow Shared Interest Members’ Event The Lighthouse, 9 May Heart and Soul Edinburgh, 18 May Christian Aid Coffee Morning Wylam, Northumberland, 18 May Celebrate in the Park Kingston Park, Newcastle, 26 May Festival of Nature Bristol, 14 -15 June

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FOUNDATION PROGRAMME BEARS FRUIT FOR SOCIETY ‘Access to Finance’ is a Shared Interest Foundation programme to provide business training. We are delighted to be starting to see the first fruits of the programmes, as these businesses find themselves prepared and eligible to apply for finance from the Society. Access to Finance training has already produced more proposals than we anticipated. Three organisations have now gone on to apply for finance totalling £750,000 from Shared Interest Society as a result of their training provided by our Foundation. One of these is Ecokim, a cocoa producer in Ivory Coast. Made up of small farmer cooperatives, it provides a livelihood for 3,620 farmers. Shared Interest Foundation worked with Fairtrade Africa to create a financial management training package for Ecokim. This included how to maintain good records and how to source finance. Since gaining Fairtrade certification in 2010, they have used their Fairtrade premium to repair bridges, build boreholes, and support local schools. Ecokim have secured a loan from Shared Interest Society which will allow them to grow their business, pay farmers upfront for the harvest, and look to the future with confidence. We look forward to further applications for finance as a result of the skills and support made available by the Foundation. Many Society members contribute to the Foundation through waiving their interest or making donations and leaving legacies. We thank you for your continued support in this regard.

Helping Wine Back in issue 89, we brought you details of a new commodity and a new producer. We are delighted now to be able to introduce you to our second customer in the business of growing grapes for the wine industry. Our Development Executive in South America, Paul Sablich, spent time in Chile getting to grips with the challenges of grape growing and wine production. He introduced Consorcio Vinicola Chile (CVC) to Shared Interest Society services, and after research and discussion, we provided them with a unique product tailored specifically to the demands of the wine production supply chain. It may take up to two years for farmers to see a return from their grapes due to the lengthy procedures from grapevine to bottle. We are now delighted to introduce a second customer from the wine market. Viñas Caupolican was founded in 2008 by a group of grape farmers who wanted to work together to obtain better prices for their produce. In 2009, the company started selling grapes to local wineries and obtained Fairtrade certification. From 2010 onwards, the company established a strategic alliance with a local wine producer, to create its own wine and sell it locally. In 2013, they started direct exports of wine to a major wine merchant.

Flow from Chile

The level of wine produced each year depends on market requirements. The local market tends to offer less competitive prices in comparison to the international market. Viñas Caupolican attended a wine exhibition in Europe in 2011 to expand its buyer portfolio.

“Shared Interest funds will ensure farmers can be paid regardless of harvest and purchasing cycles”

Members are responsible for keeping the crops until the harvest period. The farmers then harvest the grapes at the proper time to match the quality requirements of the wineries based on the level of ripening and sugar grade of the fruit.

A basic health insurance provides protection for members and their families. In order to encourage farmers to hire temporary workers, Viñas Caupolican reimburses a portion of payroll social benefits with the Fairtrade Premium. Furthermore, Viñas Caupolican provides tuition for seven members’ children who attend a local undergraduate programme.

The wineries then collect the produce from the farms directly. There the grapes are crushed to obtain juice, which undergoes several fermentation stages until it is time for filtering, packing and delivery. Finally, wine to be exported is delivered to a port for shipping. 90% of the grapes are due to be sold as Fairtrade.

Paul Sablich said: “In working with Viñas Caupolican we are further diversifying our fresh fruit portfolio. Members rely on Viñas Caupolican payments for their main income. Shared Interest funds will ensure farmers can be paid regardless of harvest and purchasing cycles.”

AGM 2014 –

ANOTHER INSPIRATIONAL DAY The 24th Annual General Meeting and Members Day was held at BMA House, London on 14 March 2014. It was a great day and the highest ever attendance with 204 members. Voting for Director and Council elections was completed in advance of the event by postal ballot.

Interest Council, having received the most member votes.

Paul Chandler was co‑opted onto the Board in December 2013, but we were delighted to welcome him officially following member votes in support of his appointment.

Feedback was overwhelmingly positive, with many stating that highlights included: meeting other members, having the opportunity to debate current issues in the workshops, talking to the overseas team and hearing first-hand the impact of their investment.

Ashley Wyatt will represent members on the Shared

REVIEW OF THE YEAR Patricia Alexander, Managing Director, summarised the main activities: time and in addition to be finalists in four other awards, winning a Guardian Sustainable Business Award 2013

•

Payments of £46.9m to fair trade organisations

•

Nearly 9,000 members investing a total of £29.5m

•

A total of 2,791 payments across 62 countries

•

138 committed volunteers located around the UK attending 85 events

Ambitious targets for 10,000 members and £33m in investment by our 25 year Anniversary in 2015

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From 6 April 2014 the upper investment limit increases from £20,000 to £100,000

•

We were honoured to receive the Queen’s Award for Enterprise: Sustainable Development for the second

LENDING PORTFOLIO OVERVIEW The lending portfolio has changed over the past eight years. In 2005, we had 43 small producer facilities, mainly in handcrafts, and 38 buyer customers. The largest facility was $250,000 for Chilean honey producers Apicoop, an existing customer, and the average facility was $30,000. Our lending was also proportionally higher to buyers with 14 having facilities of over $1m. By 2013, our lending portfolio was favouring producers, but of the 97 producer groups only 18% were in handcrafts. We have consciously tried to increase lending directly to producers as we recognise the advantages this provides to them in terms of their own capacity and development. Research shows that smallholder farmers occupy a vitally important part of the global food supply chain, providing 70% of the world’s food. However, only 2% of their financing needs are currently being met in the developing world (source: Dalberg, 2012). During August 2013, our lending directly to producers reached its highest ever level at £10.6m. 38% of our lending is now in coffee and we have prudential limits in place to spread the risk across Africa and Latin America. Another noticeable development has been the greater financial independence of buyers leading to reduced provision from Shared Interest - only seven buyer customers now have a facility over $1m. 06 QR91

”A real in the discussion

Financial Director’s report • Our 2012/13 customer interest rates remained at very similar levels to 2011/12. • Interest we earned on our deposits increased by £119k to £903k for 2012/13. We expect to earn less interest for 2013/14, however, as a result of falling deposit interest rates. • The cost of money that we borrow for lending in currency, has fallen from £126k in 2011/12 to 77k in 2012/13. This is mainly because we have needed to borrow less Australian dollars (previously an expensive component). • The cost of bad debt was £414k in 2012/13, reduced from £613k in 2011/12. • Our running costs for 2012/13 were very similar to 2011/12 after allowing for a VAT windfall payment of £119k which reduced 2011/12 costs.

real positive buzz among the members the workshops, with some excellent discussion and debate” - member

• Interest charge (for members) reflects waivers of interest for which we thank members.

“It really brought it home to me how I can make a real difference” - member

Financial RESULTS - Shared Interest Society: 2012/13 £k sterling

2011/12 £k sterling

Income

2,603

2,649

Costs

2,268

2,372

Surplus before tax

335

277

Surplus after tax & share interest

220

123

1,099

879

766

Accumulated profit & loss reserve Reserve for lending losses

The following resolutions were passed:

• Social accounts

• Re-election of Pauline Cameron and Keith Sadler and the election of Paul Chandler, all as Non-Executive Directors

• Change to remuneration for Non-Executive Directors

• Re-election of Claire Wigg and the election of Ashley Wyatt to the Council

• Financial accounts

• Pay arrangements for Executive Directors • Re-appoint Auditor, (PwC) A full note of the AGM is available on the website or alternatively by request from Membership on 0191 233 9102 or membership@shared-interest.com QR91 07

NAMAYIANA: “THANK YOU: YOU MAKE DREAMS COME TRUE”

One of the highlights of the AGM was a presentation from representatives from Namayiana, a Kenyan women’s handcraft group. Nouason ene Marona is the Chair of Namayiana, and Catherine Kasoa Mututua is the project manager. Catherine’s nick name is ‘kind one.’ Both have been involved with the group for nearly 20 years. Following a film about the life and work of the group, Nouason and Catherine gave a heartfelt and inspiring address outlining the history and goals of Namayiana members and the impact of Shared Interest finance. Namayiana is a cooperative of 112 women making beadwork jewellery to earn a living. Most rely on this for their income as the majority have received no formal education. Nouason explained that the main motivation to form the cooperative was to provide education for their children and to raise awareness of the Maasai culture.

“Together we could make a greater impact; and Namayiana was born” “Beadwork is embedded in the Maasai culture and Agnes described the meaning of the colours used in the jewellery. White means peace; red represents blood, something we share regardless of the colour of our skin; orange represents the difficult times; green signifies the land and; blue is water and life. “Before borrowing from Shared Interest we lost a lot of business as we couldn’t make and deliver orders. Why do I say that? Before, we lost opportunities to attend fairs, to meet new customers. Before, we tried other lenders. They sounded so sweet but the terms turned nasty.” Shared Interest has worked with Namayiana for over five years providing a term loan for electricity

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to be installed and an export credit facility to fund orders and ease cashflow. This support has led to an increase in orders. “In Maasai there is a saying; you need three stones for the fire to put a pot on so it balances. For Namayiana, Shared Interest is one stone, our customers are a second stone, and our members are the third stone. What you are doing today is so important. You might not know, but one day a child might go to school because of you.”

CRAFTING AN

EDUCATION

Kerrey Baker, Marketing and Relationships Manager at Shared Interest Society, introduced Central Newcastle High School to the work of Namayiana during a visit to the school, and passed on photographs of the women at work and examples of their beadwork. Alison Goldie, Head of Art, was keen to make a connection with the Maasai women, and set her pupils the task of creating designs that could be produced with the Maasai techniques. The women spent the weeks before their AGM visit bringing the designs to life. Over 90 pieces of jewellery were sent over from Kenya, and were unveiled in a special presentation and exhibition at the school. Catherine said: “Namayiana means ‘Blessed,’ and we are delighted with the way that our project has grown and developed. It is wonderful to visit the UK and meet our investors, and also to share time with women and girls in a different culture to our own.” Nouason said: “I never had a chance to go to school. Many children of my age never had an opportunity for formal education.” She has taken care of the animals, learned beadwork, and studied in adult education classes, as well as learning to drive. Catherine said: “We have 268 children in our community who are in need. The Maasai women face many challenges which are generally brought about by lack of education.” The designs and a stall at Central Newcastle High School raised over £1,500 in sales for Namayiana.

CARBON OFFSET CONTRIBUTION Each year we monitor the distance staff travel and then calculate the cost of offsetting the carbon emissions. This total was £1,035.49 in 2012/13. Some of this, along with the previous year’s funds was used for the installation of solar panels on a warehouse belonging to vanilla and cocoa producer, Gourmet Gardens, based in Uganda and the Democratic Republic of Congo.

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Climbing New Heights with coffee

FRESH THINKING

Established in 1932, Kilimanjaro Native Cooperative Union (KNCU) is the oldest coffee union in Tanzania. It is located at the foot of Mount Kilimanjaro in Moshi town. KNCU consists of 68 cooperative societies with 65,000 members made up of small scale coffee farmers producing mild Arabica coffee. Its mission is to help members achieve the best prices for their coffee in order to raise living standards. KNCU is the majority shareholder in a company set up by a number of cooperatives to run a warehouse and processing factory in the Moshi area. KNCU sells globally to buyers including CafĂŠdirect, and locally to supermarkets and hotels.

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When prices increased in the early 2000s, KNCU took the opportunity to initiate training programmes aimed at raising quality and volumes. In order to benefit from the increasing demand for the double certified (fair trade and organic) market, KNCU introduced organic production and became organic certified in 2004. This has led to the production of organic coffee complying with speciality standards, achieving higher prices for the members. In 2010 a coffee roasting project was launched to also increase the income of the members. They roast, grind, and package their green coffee independently, and sell this locally in supermarkets and shops as well as in their own cafĂŠ. KNCU has also introduced a Fairtrade tourism project with five of their cooperative societies to further maximise income and promote KNCU coffee. This includes a Coffee Tour and related excursions. In 2012, KNCU also started to process and sell sugar. In the absence of KNCU, farmers would be at the mercy of private buyers who would pay lower prices. KNCU has plans to increase the market both locally and regionally. They are still planning to franchise their coffee shop to allow more such shops to be opened across East and South Africa.

QUALITY OF LIFE The Fairtrade premium has been used to deliver an education project which has seen several students from disadvantaged families taken through secondary school. KNCU is piloting a health plan whereby healthcare providers are paid in advance for a projected number of patients. KNCU members and their families should be able to access the best health quality services at an affordable price. It is estimated this will benefit hundreds of thousands of people involved in coffee production.

NEW LENDING

Our view on an acceptable maximum level of exposure to coffee, as drawn lending, is 40% of Share Capital. This is based on activity to date together with the fact that bad debts in coffee have been low even with the coffee price spike seen in 2011.

In 2012 we supported the packaging of roasted coffee and the KNCU coffee shop. With Moshi being the closest town to Mount Kilimanjaro it attracts many tourists who stay there before and after their climb. The town is also a gateway to 35 national parks in mainland Tanzania. The KNCU coffee shop is the only shop that offers high quality coffee in town and has attracted a lot of interest from both tourists and the local community who are mainly professionals employed in banks and similar businesses as well as college students in the area. Because of this success, KNCU has decided to set up another shop in order to tap into the increasing demand.

THE CUSTOMER FEATURed on the cover of this QR IS UES IN MEXICO UES was created in 1984 with a total of 1, 400 producer members. Producers are currently located in 9 ‘Municipos’ of the state of Chiapas, Mexico. Their plantations range from 1 to 5 hectares.

The KNCU brand is very well recognised. The current shop sells coffee to more than 100 people in a day. It is expected that a similar number will patronise the new shop, which is also located in Moshi. KNCU required funds from Shared Interest Society to renovate the new café, purchase furniture and equipment as well as to pay for marketing and other related costs. The shop set up will also include recruitment and training for 15 people to manage it. We are delighted to be supporting this new venture, and look forward to updating you on the progress of the second coffee shop.

Farmers are responsible for fermenting and drying the coffee cherries. They deliver their coffee to the nearest stock centre where each batch is weighed and analysed. The harvest period is December to April. UES trucks drive through different municipalities picking up coffee, which is then classified and stocked. At the central premises the coffee is tasted and assessed for its quality, before farmers are then paid. UES provides technical assistance to the farmers to in order to improve the coffee quality and productivity on the farms. In addition, they provide support to the farmers to improve their housing. They have also provided resources for the improvement of roads connecting plantations with the stock centres. We provided an export credit facility to UES in December 2013 to help them pre-finance their contracts for export.

OUR APPROACH TO COFFEE LENDING Our board were recently presented with a paper to consider our approach to prudential lending limits for coffee. Prudential limits restrict our exposure to risk with regard to particular commodities and specify lending limits against Share Capital. HOW IT WORKS •

Farmers deliver their coffee to their respective society, affiliated to KNCU

•

The quality of the coffee is checked with ‘cup tasting’ (liquoring) before auction

•

On delivery, coffee is inspected, weighed, and registered

•

Storage, handling and transportation is closely supervised by KNCU

•

Farmers are paid cash

•

The coffee is then shipped to the factory

Tanzania Coffee Board (TCB) is responsible for the marketing of coffee

•

It is weighed again, dried, graded, and packaged in 50kg bags ready for marketing

•

TCB pay the proceeds from the auction to KNCU

•

If proceeds from auction surpass marketing costs, the difference is paid to farmers.

KNCU has a fascinating if turbulent and inspirational history. Read more about their development and innovative café and tourism activities at www.kncutanzania.com

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Address:

My name:

no stamp needed

Tell me more about investing in a fairer world

Shared Interest FREEPOST NT1883 Newcastle upon Tyne NE1 1BR

Please pass on a postcard to a potential investor

BE AN INVESTOR: SHARE IN A FAIRER WORLD To celebrate 25 years we have set ourselves a goal to increase membership to 10,000 investors and to increase Share Capital to £33 million by 2015. In order to achieve this we need approximately 1,450 new members and just over £3 million in new investment. To give you an idea of what this means: If 1 in 6 members encouraged a friend to invest we would reach our goal of 10,000 members. If every existing member invested another £357 we would reach our goal of £33 million.

Postcode: Email: Telephone:

no stamp needed

Call 0191 233 9102 or visit www.shared-interest.com

Gourmet Gardens The rain forest surrounding Gourmet Gardens provides the ideal climate to produce organic and Fairtrade vanilla and cocoa with a highly distinctive aroma. Shared Interest provides Gourmet Gardens with a credit facility to manage cash flow during harvesting and processing season. In the case of vanilla it can often take up to 12 months from harvest to sale. Shared Interest helps fill this gap thanks to its investors.

25 YEARS OF ETHICAL INVESTMENT

Address:

My name:

Tell me more about investing in a fairer world

Shared Interest FREEPOST NT1883 Newcastle upon Tyne NE1 1BR

Please pass on a postcard to a potential investor

Postcode: Email: Telephone:

Call 0191 233 9102 or visit www.shared-interest.com

Andean Naturals buys quinoa from small farms in the mountains of Bolivia and Peru and distributes it throughout North America. The organisation uses a Shared Interest credit facility to offer the 4,000 farmers involved pre-harvest payments. This means that thanks to Shared Interest investors, they can receive payment for their produce before the quinoa is sold.

25 YEARS OF ETHICAL INVESTMENT

Address:

My name:

no stamp needed

Tell me more about investing in a fairer world

Shared Interest FREEPOST NT1883 Newcastle upon Tyne NE1 1BR

Please pass on a postcard to a potential investor

BE AN INVESTOR: SHARE IN A FAIRER WORLD

To celebrate 25 years we have set ourselves a goal to increase membership to 10,000 investors and to increase Share Capital to £33 million by 2015. In order to achieve this we need approximately 1,450 new members and just over £3 million in new investment. To give you an idea of what this means:

If 1 in 6 members encouraged a friend to invest we would reach our goal of 10,000 members.

If every existing member invested another £357 we would reach our goal of £33 million.

Postcode:

Email:

Telephone:

no stamp needed

Call 0191 233 9102 or visit www.shared-interest.com

Raymisa in Peru produces and exports of high-quality crafts. They help producers find access to market. Their vision encompasses social responsibility, environmental awareness, and economic development. Shared Interest provides Raymisa with a credit facility to pre-finance contracts. They also have a term loan which is used for the purchase of washing and filtering machines to improve the alpaca thread production.

25 YEARS OF ETHICAL INVESTMENT

Please pass on a postcard to a potential investor

BE AN INVESTOR: SHARE IN A FAIRER WORLD

Shared Interest FREEPOST NT1883 Newcastle upon Tyne NE1 1BR

My name:

Tell me more about investing in a fairer world

Address:

Postcode:

Email:

Telephone:

Call 0191 233 9102 or visit www.shared-interest.com

If 1 in 6 members encouraged a friend to invest we would reach our goal of 10,000 members.

If every existing member invested another £357 we would reach our goal of £33 million.

Mpanga If you buy Cafédirect’s One Cup tea, it is highly likely that you have already enjoyed the taste of Mpanga Fairtrade tea. Mpanga Growers Tea Factory Ltd is owned entirely by smallholder farmers. Their first Shared Interest loan helped the cooperative to purchase the Kasunga tea estate. More recently, a loan has funded fertiliser vital to their productivity.

25 YEARS OF ETHICAL INVESTMENT

BE AN ETHICAL INVESTOR

SHARE IN A FAIRER WORLD

HELP US FIND 1,450 NEW INVESTORS

HELP US RAISE £3 MILLION IN NEW INVESTMENTS

OPEN AN ETHICAL INVESTMENT ACCOUNT WITH AS LITTLE AS £100

25 YEARS OF ETHICAL INVESTMENT

BE AN ETHICAL INVESTOR

HELP US RAISE £3 MILLION IN NEW INVESTMENTS

HELP US FIND 1,450 NEW INVESTORS

OPEN AN ETHICAL INVESTMENT ACCOUNT WITH AS LITTLE AS £100

25 YEARS OF ETHICAL INVESTMENT

SHARE IN A FAIRER WORLD

strategic review: a chance to have your say... The Society is undertaking a full strategic review this year which we hope will be completed by August 2014. We are keen to involve key stakeholders in this process to inform our thinking. At the recent AGM, all attendees were asked to participate in two workshops that will feed directly into the Strategic Review process. The first workshop explored Shared Interest’s current restriction to lend to only WFTO and Fairtrade certified organisations. Whilst helping to ensure provenance of our borrowers this appears to restrict opportunities to lend to impactful trading ventures. The second explored the motivations behind members’ decision to invest in Shared Interest Society and perception of risk. We would like to open up this debate to all members and would like to invite you to feedback your thoughts on the following key questions: • What motivated you to invest in Shared Interest in the first place?

would this change your view of your Shared Interest investment?

• Would you be encouraged to invest more if the interest rate on your Share Account increased?

• Would you consider investing in higher risk initiatives where the potential impact was greater? If so, would you prefer this risk to be shared or should Shared Interest create a higher risk account; and should the return be greater?

• Should Shared Interest Society remove the current stipulation that all customers are WFTO or Fairtrade certified? • If Shared Interest Society decided to remove the ‘Fairtrade’ stipulation from the lending criteria

• What do you think is the most important issue for Shared Interest Society to consider as part of the strategic review process?

Please send us your comments to the above questions at membership@shared-interest.com or you can write to us at: 2 Cathedral Square, Groat Market, Newcastle upon Tyne, NE1 1EH

THINKING ABOUT LENDING A personal Reflection from Sue James, Joint Moderator of Council Where will Shared Interest be in five years’ time? At the Members’ Day in March everyone present had the opportunity to think about areas of future lending, in the workshop ‘Beyond Fair Trade’. This prompted me to think about some other issues underlying social lending.

Another area of concern surrounds the conditions for a loan. One member suggested that Shared Interest should concentrate solely on loans for organic agriculture, as in the end this is the only sustainable method. A similar argument could be made for focussing on lending to women’s groups.

What should be the main consideration in an increasingly aggressive market? Should Shared Interest be primarily concerned with maintaining an income through gaining customers for its financial services? Or should Shared Interest focus on producers in real need, such as in Malawi where groups can face interest rates of up to 50%?

A counter proposal is that the Society is not a development agency, and is not in the business of social engineering. Such courses of action can smack of colonialism. These are all interesting areas for debate, though some may argue that they are not relevant to the main business of an investment society providing finance to support small-scale producers in the more disadvantaged parts of the world. What do you think?

Then there is the need to ensure a cooperative or group can still pay a living wage and afford loan repayments. The smaller credit unions in the UK are caught in just such a dilemma - needing to make loans to gain an income and yet not wanting their members to take out loans they cannot afford.

Contact us Shared Interest 2 Cathedral Square Groat Market Newcastle upon Tyne NE1 1EH 0191 233 9102 membership@shared-interest.com

If you would like to voice an opinion, please contact Council at sicouncil@shared-interest.com or by letter to Shared Interest, 2 Cathedral Square, Groat Market, Newcastle, NE1 1EH

Quarterly Return is the newsletter of Shared Interest Society. Shared Interest Society Ltd is a fair trade lending organisation which is a member of Co-operatives UK. It uses the pooled investments of its members in the UK to effect real and lasting improvements to people’s lives in the developing world. Shared Interest Society Ltd is registered with the Registrar of Friendly Societies, number 27093R. The Directors decide on what the interest amount will be, if any, after the end of the financial year when financial results for the past year are known. From 1 October 2011 the interest rate has been 0.5%.

QR is printed on paper from sustainable, well managed sources certified by the Forest Stewardship Council.