Annual Review Summary 2021

21 A YEAR OF RESILIENCE

ANNUAL REVIEW SUMMARY

SHARED INTEREST ANNUAL REVIEW SUMMARY 2021 3

Our mission is to provide financial services and business support to make livelihoods and living standards better for people as they trade their way out of poverty.

We know that our producers and buyers have been affected at different stages of the pandemic. Businesses worldwide have faced severe disruption in transport networks, shortages in shipping containers, and changing consumer patterns. This has been further compounded by the impact of climate change on rural communities.

OUR INVESTORS As we work towards a shared goal, our members remain at our heart. This year, our community of loyal and dedicated investors enabled us to reach a Share Capital total of £50.7m across 10,458 Share Accounts. This followed an annual increase of £4.6m – the highest amount recorded in our history.

In a year that saw the first rise in global poverty since 1998, and climate change became the issue to define an era, both organisations have made timely and relevant progress towards their goals.

Although 81% of our membership is made up of individuals, it also includes faith groups, fair trade partnerships, small businesses, schools and community groups.

The average age of a new member is 62 and the average length of time a member holds a Share Account is 14 years.

Society investment increased by £4.6m, which is the highest amount recorded in our history, to bring the Share Capital total to £50.7m at the end of the year. This enabled us to make payments totalling £59.2m to 221 organisations in 49 countries, improving the livelihoods of 374,249 farmers and artisans in some of the world’s most disadvantaged communities.

OUR PEOPLE

Product diversification has been a key theme in the business training and mentoring work of Shared Interest Foundation, along with climate resilience, and projects aimed at youth and female empowerment. This year, our charity delivered nine projects across Ghana, Uganda, Ivory Coast, Rwanda, Burkina Faso, Peru and Nicaragua.

At the core of our organisation is a motivated, engaged and skilled team of 36 people, who are instrumental in our continued growth and success. The majority of colleagues are based in our UK head office, with smaller regional teams in Costa Rica, Ghana, Kenya and Peru.

We are proud that both Society and Foundation were shortlisted in this year’s Third Sector Excellence Awards.

These prestigious awards celebrate outstanding efforts within the voluntary sector.

Continuing to adapt and respond to changing circumstances in light of Covid-19, our network of 96 volunteers are an integral part of the Shared Interest team.

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Mary Coyle, Chair

OUR LENDING

We work collaboratively and innovatively with those who share our commitment to fair and just trade. With a community of investors and the support of donors and volunteers, we seek to contribute to a world where justice is at the heart of trade finance.

This year’s Annual Review Summary sets out the achievements of both Shared Interest Society and our charity, Shared Interest Foundation.

It is testament to all of the people involved in Shared Interest that we have continued to provide vital financial services and dynamic business support. Thanks to the dedication of our colleagues, volunteers, members and donors, we are able to make trade justice a reality for communities most affected by the global issues of today.

OUR MISSION

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Shared Interest has continued to support smallholder farmers and artisans to grow their businesses sustainably, and create employment opportunities by providing a reliable source of finance during otherwise uncertain times.

THE AMERICAS

South America continued to receive the highest volume of payments (34%). Peru was deeply affected by the pandemic, reaching the world’s highest death rate per capita, and it has been estimated that this has led to a ten-year setback in poverty levels.

THE AMERICAS

83 customers are based in Latin America (47%).

AFRICA

90 customers are based in Africa (51%).

The remaining 2% are based in Europe and Asia.

Central America saw less disruption in 2020 as they experienced fewer Covid-19 restrictions.

AFRICA

Customers in Africa faced increasing challenges to transport networks and distribution systems due to government-mandated road closures and travel restrictions caused by the pandemic.

In West Africa, producers experienced difficulties as buyers were slow to commit to cocoa orders and agreeing prices due to their government setting a minimum price.

In East Africa, some coffee customers were impacted by delays in receiving payments from commercial buyers and the majority of handcraft businesses were unable to trade as their products were classed as non-essential.

Front Page Image: Belver Garcia, a coffee producer from the CECAFE co-operative,

carrying coffee fruits collected from his fields in Lonya Grande, Peru gureboba Aleera (L) and Cecilia Baba (R), members of Amongtaaba Basket Weavers Group A (working with TradeAID), in Sumbrungu Zobiko Village, Bolgatanga District, Ghana

“ I want to continue this way of working – with knowledge, experience, and motivation intertwined.”

PAUL SABLICH, HEAD OF LENDING

SHARED INTEREST ANNUAL REVIEW SUMMARY 2021 5

FINANCIAL REVIEW

WE LENT MONEY TO OVER 175 PRODUCER GROUPS SUPPORTING

374,249 FARMERS AND ARTISANS INCLUDING 124,089 WOMEN

We continued our main banking relationship with Santander UK plc., providing us with the ability to borrow foreign currency, notably US Dollars and Euros, which we need to support producers and buyers.

During the year, we also successfully repeated the approach of converting a proportion of our Pound Sterling capital into these currencies for a fixed period of time and at an agreed exchange rate. This helped to manage volatility on the exchange rate for borrowing currency to carry out our lending, and reduced borrowing costs during the year. We also retained an active relationship with the Co-operative Bank, operating an account which is used by members to pay in their investments.

2019 £’000

2020 £’000

2021 £’000

Credit charges Bank deposit interest Other Total

2,928 147 89 3,164

3,264 55 125 3,444

3,513 58 63 3,634

3,362 54 115 3,531

3,153 50 112 3,315

Finance Costs Provision for doubtful debts Operating costs Corporation Tax Profit before members’ interest and donation Members’ interest Donation £/$ Exchange rate at the year-end

(427) (664) (2,025) 48 (72) 1.34

(448) (793) (1,985) 218 1.30

(472) (857) (2,193) 112 (73) 1.23

(233) (1,166) (2,131) 1 (83) 1.29

(94) (1,012) (2,055) 154 (93) 1.35

Tangible fixed assets Investments Lent to customers Cash and deposits Debtors Loans owed to the bank/overdrafts Other creditors < I year Other creditors > I year Total

153 115 29,918 40,821 90 (29,501) (521) (214) 40,861

161 121 36,330 42,234 128 (35,241) (506) (214) 43,013

158 128 36,037 44,301 107 (35,155) (514) (238) 44,824

118 123 29,660 46,960 64 (28,485) (373) (238) 47,829

111 118 31,776 52,051 126 (31,313) (388) 52,481

Capital Proposed share interest Proposed donation to Shared Interest Foundation Profit and Loss Total

39,367 70 1,424 39,367

41,371 1,642 43,013

43,071 72 1,681 44,824

46,148 82 1,599 47,829

50,730 91 1,660 52,481

BALANCE SHEET

Operating costs for the Society reduced by £158k from the previous year. The main reasons behind this were the low amounts of travel, reduced rental costs and lower marketing costs as we moved a large proportion of promotion online, all as a consequence of the pandemic. Profit before provisions and interest was almost identical to the previous year.

The bad debt charge for the year remains high at just over £1m but has reduced from 2020, leaving an overall surplus of £61k once interest to members is factored in. This leaves the Society within, but at the lower end of, its targeted range of reserves (more details are available in the published annual statutory financial statements). Nevertheless, the overall financial position of the Society remains strong, with a record year of growth in member capital of £4.6m. In addition to specific provisions against doubtful accounts, which are cumulatively £10.2m, we have reserves from this and previous years’ surpluses, totalling £1.66m.

2018 £’000

STATEMENT OF COMPREHENSIVE INCOME

The 2020-21 financial year was again challenging due to the global Covid-19 pandemic, making it harder to bring new customers on board and for some existing customers to trade successfully. There was also a period of uncertainty around elections in West Africa.

The average exchange rate of the US Dollar to the Pound Sterling during the year was 1.37 (last year 1.28). Together, these factors led to a reduction in our principal lending income of £209k. After other items, our total income decreased by £216k. The net amount lent to customers at the year-end was close to £32m.

2021

2017 £’000

The summary of the financial statements above is an extract of the full audited financial statements for the Society, which are available on request from the Company Secretary or can be downloaded from our website.

The majority of our lending and overseas payments are made in USD, thus the exchange rate with sterling has a significant impact on the figures.

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Aisha Najuma, a Kibinge coffee producer, holding freshly picked coffee berries on a farm in Uganda

2021 6 SHARED INTEREST ANNUAL REVIEW SUMMARY 2021

SHARED INTEREST ANNUAL REVIEW SUMMARY 2021 7

APICOOP CHILE

CYAHINDA

Chino Henriquez, General Manager at Chilean honey and blueberry co-operative Apicoop, joined us for an online event and explained how they are building their resilience to climate change. He said: “Bees have been telling human beings for millions of years that the only way to survive is by working together.”

“ Shared Interest investors have helped us to withstand this difficult time.”

RWANDA

Cyahinda is an award-winning Rwandan coffee co-operative.

Founder Niyonsaba Betty Scheba started growing coffee in her garden but dreamed of owning a coffee washing station. She said: “Our passion for coffee extends to the hardworking people who nurture and grow it.”

Apicoop has over 200 members, located across several hundred miles of diverse landscape. Chino told us that this wide spread of producers was a strategic decision early on to mitigate the impact of changing climate conditions.

BYAMBAJARGALM MUNKHJARGA, ANGEL FELTING

A BETTER FUTURE FOR THE COMMUNITIES WE SUPPORT Andrea Yanez Alvarez, who works at Apicoop, holds honey produced at Apicoop farms in Chile.

ANGEL FELTING MONGOLIA

Founded in 1999, Angel Felting is a small handcraft business based in Mongolia. Husband and wife Dashdorj and Byambajargal set up the business by making woollen slippers at home.

Angel Felting became a customer in 2020 with the aim to develop their felt boots for outdoor use, and maintain a level of stock all year round. This year, they used Shared Interest finance to buy additional materials to respond to increased demand for their slippers during the pandemic.

This year, Shared Interest finance supported the co-operative in constructing a warehouse for vital storage.

A YEAR OF RESILIENCE

“ Our individual lives are full of ups and downs. But the important thing is that we will fix our problems together.”

CHINO, APICOOP

ASUNAFO BURKINA FASO

Asunafo cocoa co-operative initially contacted Shared Interest for a loan to buy fertiliser so farmers could improve the quality of their crops.

They went on to receive finance to purchase a truck to help transport their increasing production of cocoa.

When Asunafo President Daniel Amponsah joined us for an online event this year, he said:

“ Our mission is to help farmers have a better life, and working with Shared Interest has supported us to fulfil this.”

SHARED INTEREST ANNUAL REVIEW SUMMARY 2021 9

TREE

PLANTING 135,275 TREES

Over the past year, we delivered nine projects, which supported the development of new businesses, created opportunities for young people, increased producer environmental resilience and provided a vital income source to rural communities.

This project is supporting 50 young people (20% female) to establish their own cocoa farm, generate a source of income and contribute to the sustainability of cocoa production in the region.

This project is supporting 50 young people (32% female) aged between 18-35 to each establish their own cocoa farm and build it into a robust and sustainable business.

including:

BEES FOR BUSINESS

70,000

The Bees for Business project supports 75 women in rural Burkina Faso to become beekeepers.

COFFEE TREES IN EAST AFRICA

WEST AFRICA

GROWING FAIRER FUTURES IN RWANDA

GROWING FAIRER FUTURES IN GHANA

Our projects have seen us plant

60,000 COCOA TREES IN

Shared Interest Foundation changes lives across the globe by helping people to cultivate resilient businesses and break the cycle of poverty.

Beekeeping is providing a sustainable source of income for the women, who are now able to better meet the needs of their family and support the development of their community.

BEES FOR BUSINESS: PHASE 2

4,275

CROP TREES AND SHADE TREES IN AFRICA AND SOUTH AMERICA

The second phase of this project supported 50 members of the Benkadi de Dakoro women’s group in rural Burkina Faso to establish a beekeeping enterprise.

1,000

MORINGA TREES IN BURKINA FASO

2 0 2 1

The project aimed to further increase the income level of the group and improve their financial resilience through diversifying into growing sesame, a high value crop, and increasing the business and finance skills of the group.

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Our third Growing Fairer Futures project supports 50 young people in Western Rwanda to establish their own coffee farms.

GROWING FAIRER FUTURES IN IVORY COAST

INCREASING ECONOMIC OPPORTUNITIES FOR WOMEN IN GHANA In Northern Ghana, we provided 120 basket weavers with the skills and tools needed to diversify into vegetable farming.

“ Now that I participate in beekeeping and sesame cultivation, there are changes in my life. My level of knowledge has increased and I can also contribute to the food and school fees of my children.”

BUILDING SUSTAINABLE LIVELIHOODS FOR WOMEN IN RURAL NICARAGUA Working in partnership with Coproexnic, we are supporting 40 women in rural Northern Nicaragua to become organic sesame farmers.

IMPROVING ORGANIC COFFEE PRODUCTION IN PERU

Working in partnership with CECAFE, we have so far supported 176 coffee farmers in the Northern jungle of Peru to increase their resilience to coffee pests.

INCREASING THE RESILIENCE OF COFFEE FARMERS THROUGH INCOME DIVERSIFICATION IN RWANDA

Working in partnership with Bukonzo Organic Farmers Co-operative Union (BOCU), this project is supporting 365 smallholder coffee farmers to improve their crop and diversify into passion fruit as an additional source of income.

Leider Delgado collects coffee plants from the CECAFE co-operative greenhouse in Lonya Grande, Peru

ABI OUATTARA, BEES FOR BUSINESS PARTICIPANT

SHARED INTEREST ANNUAL REVIEW SUMMARY 2021 11

USING MONEY WISELY Shared Interest Foundation receives grants from donor organisations, which enable us to deliver our projects. Over many years, these funds account for around 45% of all our income, with the balance coming from the generous donations of individuals, groups, trusts and legacies. These donations are vital as they allow us to develop and grow new projects based on robust needs analysis.

Over the year, we have received new funding from the following trusts and organisations and we would like to thank them for their contribution to our achievements: Guernsey Overseas Aid & Development The Marr-Munning Trust

INCOME AND EXPENDITURE Year ended 30 September 2020

Year ended 30 September 2021

Unrestricted Funds £’000

Restricted Funds £’000

Total Funds £’000

Unrestricted Funds £’000

Restricted Funds £’000

Total Funds £’000

Donations & grants Interest income Total income

219 1 220

130 130

349 1 350

287 1 288

74 74

361 1 362

Transfers between funds Net surplus/(deficit) Funds brought forward Funds carried forward*

52 167 219

152 174 326

91 (33) 58 219 107 326 310 74 384

Cost of fundraising Charitable activities Governance costs Total expenditure

13 152 3 168

30 30

100 7 107

13 182 3 198

11 182 4 197

107 107

11 289 4 304

SHARED INTEREST FOUNDATION IN 2021

*Of the unrestricted funds carried forward, £193k (2020: £150k) is committed to be spent on designated projects already underway or commencing in the new financial year.

With the support of

1,049 DONORS & 5 GRANT MAKERS

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We delivered

9 PROJECTS

across Africa and Latin America working with 8 local partners

We worked with

Delivering training to

who support

(56% WOMEN)

7 CO-OPERATIVES 10,257 PRODUCERS

740 FARMERS

Supporting

PRODUCERS of 6 commodities

(3,862 WOMEN)

Bees for Business participants holding beeswax on a farm in Burkina Faso Back

cover: Lemberona Co-founder Elmira Bertagnoli with Rustam Rahimov, president of smallholder producer organisation Torob Bobo in Uzbekistan. Photographer: Isrofilov Bahtijor

LOOKING FORWARD There is no doubt that the impact of climate change will take further precedence in the year ahead. The Fairtrade Foundation states: ‘The climate emergency remains the biggest threat to the livelihoods of millions of small-scale farmers and workers in low-income countries across the world.’ Covid-19 has also shown us the extreme vulnerability of rural communities, which do not have the infrastructure to cope with a public health emergency. According to the Foreign, Commonwealth & Development Office, there has been an estimated ten-year setback in poverty levels in Peru as a result of the pandemic and many more regions are similarly affected.

It is therefore clear that the future holds growing challenges for developing world producers. Although we recorded the highest increase of Share Capital in recent years, the demand for our finance also continues to grow. The year ahead will see us continue to focus our lending towards those most in need, particularly smallholder farmers and handcraft co-operatives.

Working alongside our charitable arm, Shared Interest Foundation, we will continue to build more resilient businesses that are able to respond effectively to future shocks such as crop disease, floods, drought and civil unrest.

When surveyed this year, our members told us that we remain true to our mission. To ensure that we continue to do this effectively, whilst also evolving in line with an ever-changing global landscape, we are entering into a full strategic review with multi-stakeholder consultation. Most importantly, we will ensure that our members continue to contribute, question, and increase their knowledge of our organisation, and understand fully the difference their investment makes.

After all, it is this understanding and shared purpose that enables us to provide a reliable source of finance in increasingly uncertain times. We look forward to working together with our community of dedicated supporters, so that farmers and artisans across the globe can continue to increase their resilience and provide for themselves and their families in 2022 and beyond.

Please visit our website for further details of our plans for 2021/22 at www.shared-interest.com/annualreview