Shared Interest

For some time now, Fairtrade Hay have been investing any profit they make from events they hold into a Shared Interest account. The minimum that can be put in is £100, so the group usually waits until it has a round number to put in.
Last night Sue James, of the Council of Shared Interest, came to speak at Tomatitos. When I got there, she was just explaining about the makeup of the Council, which includes randomly selected investors - so one year someone from Fairtrade Hay might be asked! The only requirement seems to be that they can get to Newcastle, where the meetings are held, three times in the year. The AGMs are held alternately in Newcastle and "somewhere further South" - the nearest to Hay so far has been in Bristol.
Shared Interest started off at about the same time as Fairtrade, the founder realising that some capital would be needed by Fairtrade producers and buyers to make the system work. This year, they have £33 million to loan out, and they do it in countries round the world. At first, they had an office in Newcastle, but now they have four more - one in Peru, one in Costa Rica, one in Kenya and one in Ghana, which makes it easier for members of staff to visit borrowers who often live in remote areas.
One of the main borrowers are coffee co-operatives. When the farmer harvests his or her coffee crop and brings it to the co-op, they need to be paid straight away, but the co-op needs to sell the coffee before they have the money. So they take out a loan to pay the farmers, and pay it back when they've sold the beans.
Other loans are to improve machinery, or install electricity - that sort of thing. We were told about a banana group which used the money to install a cable car arrangement between the farms so the bananas could be transported through the jungle, and a group of women in Africa who make beaded craftwork who installed solar panels, so now they don't have to go to the nearest town to charge their mobile phones!
There are quinoa farmers in Bolivia, exporting to the US, and vanilla farmers (and this is where I learned that vanilla is actually a type of orchid, which grows up a tree!).
47% of the money goes to coffee producers, but strangely only 1% goes to tea producers. One of the things that they have started doing is to offer a loan to producers whose coffee plants have been affected by roya, a coffee disease, so that they can replace their plants with more resistant varieties. Of course, it also takes five years for coffee plants to mature enough to produce a crop.
In India, loans are made through charities like Oxfam and Traidcraft as Shared Interest are not able to work there directly, but they still managed to work with 51 organisations there last year.
Mostly they deal in US dollars, and a little (mostly in French speaking areas of Africa) in Euros, because dealing in all the local currencies would be too difficult. The interest rates they charge on loans varies from country to country and organisation to organisation, too, depending on the individual circumstances. Meanwhile investors didn't get any return for a few years, because of the banking crisis. It's only in the last couple of years that they have got half a per cent of interest, because the Council thought they ought to get something back!
Investors have an equal voice and vote in the company whether they have invested the minimum of £100 or the maximum of £100,000.
There's also a charitable wing of the organisation, for producers who need more help than a conventional loan can give.

More information can be found on the website at www.shared-interest.com
Financial matters can tend to be quite dry, but this really was a fascinating evening, and the members of Fairtrade Hay now have a much better idea of where their money is going and how it all works!