Financial services

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.

You can read more about Financial Services in Social Accounts