FAQ

Am I eligible to work with Shared Interest?

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.

What are WFTO and FLO?

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.

I sell my products locally; does that hinder me in working with Shared Interest?

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.

How do you decide on interest rates to customers?

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.

Do you take security against borrowing?

No, Shared Interest does not typically ask for any kind of security against the facilities it provides.

How much can my organisation borrow?

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.

Do you charge any fees?

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.

How does the export credit facility work for producers?

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:
financing-fairtrade

Do you provide term loans?

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.

Will my organisation have to reapply each year?

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.

For how long are the export credit facilities available?

Our Export Credit facilities work on a rolling basis and do not have a period of availability as such. Our Term Loans are available from one to five years, while our Stock Facilities and Pre-harvest Loans run over a period of one year and can be renewed annually without reapplication. Please visit our product pages to learn more.

What information will I have to provide?

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.

What kinds of conditions will my organisation have to meet?

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.

How long does the application process take?

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.

Will you visit us?

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.

What currencies do you work with?

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.

What countries or regions do you operate in?

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.

Do you lend to individuals and private organisations or just producer groups?

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.

Do you help producers to market their products?

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.

Do you provide training for producers?

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.

I have a question but it is not on this pageā€¦

Please visit our contact page to find details of how you can get in touch with Shared Interest to ask your question.