We require that producers are WFTO members or FLO-certified.
In addition, we require at least 3 years' trading history, a
positive balance sheet and for there to be at least one export
buyer in Europe, North America or Australasia.
WFTO is the
World Fair Trade Organization and FLO is
Fairtrade International. WFTO is a membership organisation for
producers and buyers that meet their standards, while FLO sets and
monitors the standards for FLO-certified commodities. Shared Interest only
works with WFTO members and FLO-certified producers as that helps
us to ensure that our funds are only directed to those within the
fair trade world, making us the world's only 100% fair trade
lender.
Due to our business model and the way our facilities are repaid,
we do prefer to work with producers that have at least one export
buyer. We do, however, look at every application on a case-by-case
basis and could potentially consider a facility if repayments can
be made in hard currency (USD, GBP or EUR). We would also need to
conduct further research in to the buyers you work with locally in
order that we may better understand how they operate.
Our interest rates depend on two things: the cost to Shared
Interest of borrowing the currency for the customer's facility (the
prime rate); and the assessed risk of the customer to Shared
Interest (the risk premium). The prime rate plus the risk premium
provides the overall interest rate for a given facility or
customer. We consider a number of factors specific to each
individual borrower when establishing the risk premium and this is
why we require information from customers in advance before
advising of the potential interest rate.
No, Shared Interest does not typically ask for any kind of
security against the facilities it provides.
The amount Shared Interest can lend to an organisation depends
on a number of factors. We assess every application on its own
merits and the funds available will be determined by a combination
of the need of the organisation and its financial position to make
repayments. As we have a finite amount of funds from which we can
lend (the share capital invested by our members), we will also
consider the current availability of this for each application we
receive. In addition, Shared Interest has limits on how much it can
lend to particular countries, regions or products at any given time
and we also take this in to account. We do ask that potential
borrowers comply with our eligibility criteria - please see the apply page for further
details of this.
There is a 1% set-up fee for all of our products, which is only
charged at the beginning of a facility once it has been approved.
This also applies to any facility increases that occur during our
working relationship. The purpose of the fee is to cover the
administration costs associated with setting up the account.
Additional fees may also apply for late payments, under payment or
exceeding your credit limit while you have an account with us.
A Shared Interest Export Credit facility works by making
funds available against particular orders or contracts - 80% of
order value for handcrafts and 60% of order value for commodities.
Each facility has a limit up to which funds may be drawn, just like
a credit card. Funds can be drawn down to pre-finance an order and
will be repaid when the buyer makes payment to the producer through
Shared Interest on the order's completion; Shared Interest takes a
portion of the buyer payment to cover the amount borrowed plus
interest and forwards the balance on to the producer. When the
buyer is also a Shared Interest customer, the pre-financing of an
order can be shared. When repayment has taken place, it frees up
the funds within the credit limit so that they can be used against
another order. An Export Credit facility can be used for
many orders at the same time as long as the total amount borrowed
does not exceed the credit limit.
The flow of funds between Shared Interest, a producer and a
buyer is represented below:
Yes, Shared Interest does provide term loans for the purchase of
infrastructure (building or machinery, vehicle or cableway), if you
want to purchase shop stock or if you would like to attend an
exhibition in order to network and increase your sales. To find out
more, please visit our Term Loans for Producers page.
Shared Interest looks to build long-term relationships with its
customers. Each account with us undergoes an annual review, but our
customers do not need to reapply each year.
Each application is different and we may need more information
from some customers than others. As a general rule, we will need to
receive at least the following:
- Proof of fair trade status (WFTO membership or FLO
certification);
- Last 3 years' accounts (balance sheet and profit and loss
statement), ideally audited;
- Profit and loss forecast for the coming 12 months;
- For any type of loan or Stock Facility application, a 12-month
cash flow summary including receipt and repayment of the loan
itself;
- Your plans for your business / a business plan;
- A breakdown (%) of the products you sell;
- A breakdown (%) of your sales channels (e.g. retail and
wholesale, local and export);
- Work experience details for your founders / management
team;
- An understanding of your ownership structure;
- Details of existing borrowing facilities that you have (the
amount, the interest rate, the length of the term and whether any
security has been pledged);
- An understanding of the challenges your business faces now and
may face in the future;
- An understanding of the social impact you have on the community
within which you work;
- A completed application form and signed declaration;
- Money laundering documents.
There may be certain conditions that customers have to meet
before we can make any funds available. These usually relate to the
confirmation from an organisation that they accept the terms of
credit, the details of how the funds will be repaid and any further
financial information that Shared Interest requires. This varies
from one organisation to another and depends on the specifics of a
particular application and the product that has been applied for.
In addition to the 'precedent conditions' highlighted above, there
are more general conditions that apply throughout the duration of
our working relationship. Again, these vary depending on the
particular circumstances of a customer, but typically include
details of the timescales relating to payment and provision of
information for annual reviews, as well as making Shared Interest
aware of any changes in circumstance, financial or otherwise.
We aim to have applications completed within 3 months of
receiving the required information. As we don't take security, this
is the time required for us to complete our necessary checks and
research. Some applications are processed quicker than this while
others take a little more time and this depends on the particular
applicant and their responsiveness to requests for information.
In the vast majority of cases, a member of our team, usually
from the regional offices, will visit your organisation to meet the
team and research the operation. This enables us to collect much of
the information required to complete an application and helps to
build the relationship between us.
We will only lend in hard currencies (usually USD, GBP and EUR)
as they are generally more stable and used for international trade,
including fair trade.
Shared Interest has operated all over the world since we were
founded in 1990 and we have regional offices in Nairobi, Kenya and
Lima, Peru, as well as an on the ground presence in Costa Rica. We
are not currently able to lend money directly to producers in
India, Bangladesh, Pakistan or Nepal due to exchange control
legislation, but we do make multiple payments to numerous fair
trade producers across the region on behalf of our fair trade
buyers. If you are based in a country where we have not operated
before, we may need to conduct some research as to whether it is
possible for us to do so before considering an application.
As a general rule, we prefer to lend only to producer groups. We
look at each application on its own merits and may lend to a
private organisation where the fair trade principles are in place
and we feel that the social benefit to the communities involved
warrants our financial assistance. We do not work with private
individuals.
Shared Interest's specialism is lending and we are not qualified
to assist organisations with their marketing. In some cases we may
be able to make introductions between buyers and producers, but
this is not something that we do on a routine basis.
Shared Interest Society does not provide capacity building
training for producer groups. Our sister organisation, Shared
Interest Foundation, does work with producers in this area. To
learn more, please click
here.
Please visit our contact page to find details of how you can get
in touch with Shared Interest to ask your question.
