Broadly speaking, our lending falls into two categories: funds
lent directly to fair trade producer groups in developing countries
(producer lending), and funds lent to fair trade wholesale or
retail businesses in developed countries (buyer lending). The
majority of the funds we lend to buyers are used to pre-finance
orders, so we also send this money to producers, on buyers' behalf.
We therefore refer to 'recipient producer payments', meaning those
organisations that will receive funds from us, which have been
borrowed by a buyer.
This year, payments to our producer customers amounted to
£32.2m. Recipient producer payments as a result of buyer lending
were £19.2m. This totals £51.4m of payments in the year the highest
in our history and £3.4m more than last year.
This represents 154% of the value of our share capital held at
the start of the year. We can do this because when loans are
repaid, we are able to lend the money out again.
While we still lend significant funds for coffee, in which
farmers have suffered from the blight of crop pests, we have also
pursued a broadening in the range of commodities for which we lend.
We have a diverse regional and product lending portfolio, which
allows us to manage lending requirements which peak at different
times of the year depending on the product and region. Being
confident that all loan facilities will not be required
simultaneously allows us to commit to a higher total value of
facilities than we physically hold in share capital.
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