Image: Shared Interest
As Shared Interest Society celebrates its 25th anniversary this year, we look back on what the organisation has achieved in that time…
Shared Interest was launched in 1990 and attracted £750,000 in share capital and 600 members in the first year alone.
Managing Director, Patricia Alexander said: “Our real journey started off as early as 1986 when Traidcraft Exchange found that the main challenge faced by fair trade producers was access to working capital.
“We now form the link between UK social investors and fair trade organisations needing finance to improve their livelihoods.”
By inspiring almost 9,000 people in the UK to become members and invest over £32m, we are able to share the risk of unsecured lending to people living in need of fair finance.
Last year alone, we made a total of 2,712 payments to 400 organisations in 65 countries, totalling £48m.
One of these organisations is WFTO member, Raymisa. Established over 30 years ago, Raymisa is a volunteer organisation that developed out of a desire to support disadvantaged artisans. Today they work with more than 300 artisans and over 3,000 alpaca farmers across Peru, securing sustainable and reliable incomes for these individuals.
How does Raymisa’s businesss model work? Alpaca farmers in Cuzco supply wool directly to the factory in Lima to make clothes and other handcrafted goods. The farmers receive increased income for their alpaca wool, as well as a guaranteed buyer and the artisans, in turn, benefit from cheaper priced wool and additional income from the sale of their products.
Raymisa was founded with the purpose of promoting a socially responsible business that would improve the livelihoods of Peruvian craftsmen in the poorest areas of the country.
From the very beginning, the organisation focused on creating fashion-led products. This involves remaining up to date with the latest trends and technology, which has been a key factor of their success.
For instance, Raymisa invested in a modern industrial machine to manufacture textiles, particularly orientated to tailor alpaca and cotton clothes. This equipment has helped increase productivity and prepare new and better designs. On average, half of the total production is manufactured by Raymisa directly and the remaining half by the craftsmen.
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.
Patricia continues: “In the early days, the majority of Shared Interest’s lending was in handcrafts but over the years, our lending has become driven by commodities. Handcrafts now receive 10% of our lending facilities, coffee represents the greatest proportion at 47%, and we have had growth in cocoa and fruit in particular.”
We lend to a wide range of fruit producers; from coconuts to vanilla. This includes us lending to the largest supplier of Fairtrade vanilla in East Africa where the surrounding rain forest provides the ideal climate. WFTO member, Gourmet Gardens has a 20 hectare plantation near the Virunga National Park, just over the border from Uganda. They also work closely with a group of 1,000 local farmers called Le Jardin Bio Equitable. The actual production area is located on the bend of a river that offers some protection from potential violence.
During the years of war, Uganda's people and economy suffered extensively. Though relative peace has returned to the area, most of the large workforce is still unemployed. Agriculture remains one of the worst hit sectors, which has always been the lifeline for most of the population.
Shared Interest provides Gourmet Gardens with a credit facility to manage cash flow during harvesting and processing season. The farmers need to be paid at harvest but buyers of their products usually send payment after their items have been shipped and received. In the case of vanilla it can often take up to 12 months from harvest to sale. Shared Interest is able to help fill this gap thanks to its investors.
Operations Manager Dr Clemens Fehr said: "The Eastern Democratic Republic of Congo is not an easy place to work. Being land-locked, businesses face the challenge of high transport costs. The situation is aggravated by a long and devastating civil war. Furthermore, there is little trust in the country and its financial institutions.
"Establishing and running an organic and Fairtrade certified farmer group within such a context is challenging.
"However, over the years we have found ways to deal with most of these challenges. The exception remained access to adequate finance.
"We believe that the support of Shared Interest will help to overcome this last key bottle neck in our business, to the benefit of the members of the farmer group and our company.
To mark its 25th anniversary, Shared Interest produced a film showing how the organisation has grown and helped businesses like Raymisa and Gourmet Gardens to thrive. You can watch the film here.
By Stina Porter