FAQ
Ambassador FAQ’s
These questions are compiled from a list of questions Shared Interest Ambassadors were asked during Fairtrade Fortnight. Please continue to email us with questions you receive so we can add to this page for the benefit of all Ambassadors.
Society Background
· Who does Shared Interest bank with?
Presently Shared Interest banks with the Co-operative Bank, as we have since the organisation was started nineteen years ago. Some funds are placed with other social lending organisations. You can even add to your Shared Interest account at your local Co-operative bank by using a paying in slip with your Share Account number on.
· Was Shared Interest set up by Christians?
The Society was founded on the Christian principles of love, justice and stewardship, but is in fact all inclusive irrespective of faith.
Membership
- How much of investors money is spent on administration?
None. All of our members’ money is used for lending to producers and buyers involved with fair trade. The administration expenses and overheads of Shared Interest are paid for by the interest we receive for money held in deposit accounts and interest we charge on loan facilities.
· What proportion of members waive their interest (when there is interest, which is usually the case, if not currently!)
22.25% of account holders waive their interest, so this money goes back into the Society Reserves. Another 63.93% of account holders leave their interest in their Share Accounts. Only 10.5% of account holders receive their interest into another account by bank transfer or by cheque. The remainder of account holders donate their interest to the Foundation.
· Of Shared Interest’s approx. 8,700 members, how many are groups of individuals and how many are organisations such as businesses, schools or faith groups?
We currently don’t have that break down of information. However it is something we are looking into.
Customers/ Producers
· How does Shared Interest decide who to loan to?
For producer organisations, membership of the World Fair Trade Organisation, previously known as IFAT, certification by FLO (the international Fairtrade Labelling Organisation) or a proven trading relationship with a buyer member of either EFTA (the European Fair Trade Association) or the Fair Trade Federation USA is our requirement for lending.
For buyers, membership of WFTO or the Fair Trade Federation is our requirement. Registration with FLO is not applicable, because many commercial buyers that sell some fair trade products are not fair trade organisations as a whole (e.g. supermarkets).
Sometimes, if a buyer we have a relationship with recommends a producer that is not a member or certified by any of the required organisations, we may lend to them on the condition that they join WFTO.
Are we oversubscribed with requests from customers/potential customers and if so what criteria do we/will we apply to decide who to lend to?
Shared Interest is currently oversubscribed with such requests and thanks to the fantastic relationship we have on the ground with producers through our overseas staff, Hugo, Rachel and Paul, we also know that there is huge additional scope for the fair finance we provide. This is why we are having a big drive to increase investment.
The business development team who present the requests primarily focus on the disadvantaged. We like to be the first lender that works with a producer to open the door for them to be able to access other forms of credit and finance. It is also a matter of whether the producer can provide all of the requested information within a given time frame. However, it is a narrative relationship-based exercise, not just a case of ticking boxes, and other factors, such as how the organisation is run and its social impact, are taken into account, and each application is decided on a case-by-case basis.
- What interest rates do we charge buyers and producers?
Interest rates are worked out individually and many factors are taken into consideration such as the product, company risk and the country the producer is based in. The interest rates we offer are ‘fair’ rates and will tend to be lower than commercial alternatives.
· What happens if crops fail/ people can’t pay?
A lot of our customers are co-operative groups, and with coffee, for example, we often find they will take beans from many regions to fulfil an order, ensuring that if there is a crop failure in one region they will have enough beans from other regions to be able to fulfil their orders. Our default rate on payments is less than 1%, so such cases are few and far between. If this does happen then our regional development staff and customer services team work closely with the customer to come up with a solution.
As an organisation we are working to increase the number of regional offices we have over the coming years which shows our long term commitment to fair trade producers. We work towards sustainable development with our mix of pre finance and term loans.
· Is there enough money to insure against customer failure to repay?
It is the responsibility of Shared Interest to have a certain amount of reserve funds to protect against unforeseen loss and to protect members’ investment.
Most of the producers will also have insurance themselves, as no producer would want to leave themselves open to such instances, and this is something taken into consideration when applications are reviewed.
Foundation
· The next question relates to the Big Lottery Fund grant for the Rwanda training programme.
Does Shared Interest ever consider giving say 10% of funding to producers for them to use as they choose, as a measure of trust, as some charities do?
Shared Interest Foundation carry out participatory needs assessment with all of the businesses that we work with, this in-depth analysis ensures that all of our projects meet the individual needs of each and every business. As we involve the craft makers and farmers throughout the whole planning process we ensure that funding to towards the projects goes the specific needs of the organisation.
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