Summary

We believe our work contributes to the attainment of specific Sustainable Development Goals (SDGs) from the 17 SDGs agreed by the United Nations in 2015 as goals for building a better world by 2030. Our Theory of Change (ToC) process has helped us evaluate our impact more effectively. We use this model to inform our monitoring and evaluation framework.

As Shared Interest Chair Mary Coyle says in her Welcome: "Shared Interest Society and Shared Interest Foundation have worked hand in hand with farmers, artisans and communities, to strengthen enterprises, increase employment opportunities and implement innovative methods of sustainable farming."

We could not have reached our operational goals, and therefore achieved the impact described in this report, without the support of members, colleagues, donors, volunteers and partners.

Our members remain at our heart, and we closed the year with 10,416 Share Accounts, 78% being held by individuals. However, the Society membership is diverse and also includes faith groups, fair trade partnerships, businesses, schools and community organisations. Despite the very challenging economic outlook, investment increased by £1.6m, and Share Capital totalled £52.3m at the end of the year.

In line with these evolving changes in news consumption, we increased our advertising presence online alongside our more traditional print advertising in various publications including the Big Issue and Amnesty International. We know that enquiries are generally converted in the first seven months after the initial contact, and conversion rates have remained steady over the past four years but this year, we saw the number of new enquiries slow significantly. We believe that this is directly related to UK economic conditions, causing increased household expenditure. Furthermore, recent economic uncertainty has led to a reduction in consumer confidence, which has also impacted both enquiries and investment levels. According to PwC, the UK household savings rate is set to fall by 70% (or £4,000 less) on average compared to the highest levels during the pandemic and will fall to an average rate of around 6% of household income. This echoes our results and over the year we attracted 200 new members to the Society with an average opening balance of £2,008 (2021: £1,494) but due to share account closures we actually saw a net reduction 31 Share Accounts compared to a net increase of 221 last year.

Our members are extremely loyal, and we pride ourselves in providing exceptional customer service. Over the past year, we have been focusing on improving our levels of engagement, building up members’ understanding and knowledge of their investment and impact through our quarterly magazine, e-newsletters, phone calls and improving our internal processes. We continue to encourage more members to manage their Share Accounts online to reduce the need for print and postage. We now have 48% of our members using the Member Portal (2021: 44%), which we have further developed this year.

This year saw us complete our Strategic Review process, which included our largest ever stakeholder consultation process with interviews, research projects and 130 members participating in online discussion workshops. It is clear that our members want us to stay true to our mission. Throughout our stakeholder consultations, members told us they do not want us to lose sight of the small and disadvantaged organisations we support and that we must maintain the purpose Shared Interest was set up to achieve 32 years ago. Our new strategy sets out how we will continue to widen our support for fair trade, extending our lending to organisations who are working towards Fairtrade certification, as well as those who meet the 10 Principles of Fair Trade. We will also continue to assist businesses in adapting to the challenge of climate change by building partnerships, encouraging our customers to become more climate resilient, and by developing information resources for our members. Gender equality has an extremely significant part to play in strengthening communities. By supporting women who live in remote and rural regions, we can increase productivity and promote economic growth. Narrowing the gender gap not only helps women prosper, it helps their families and communities thrive. We will therefore continue to support producer organisations that meet our lending criteria and create opportunities for women’s empowerment.

Our charity, Shared Interest Foundation, is supported by donations from 1,548 donors, and grants from Trusts and Foundations. The majority of these donors (1,383) are members of the Society. Over the past year, we delivered 12 projects in Africa and Latin America, which supported the development of innovative initiatives to generate vital income for rural communities. This work aimed to strengthen the climate resilience of producers, as well as creating income-generating opportunities for women, young people and established enterprises. Overall, 2,365 farmers and producers were provided with training across seven countries, and we supported 2,981 producers to grow coffee, cocoa, passion fruits, vegetables and sphagnum moss.

This year we concluded one project to improve organic coffee production in Peru and launched six new projects:

Ensuring environmental protection and biodiversity conservation through income diversification (Peru)
Strengthening coffee producers’ resilience to climate change (Rwanda)
Improving livelihoods through agro-processing (Burkina Faso)
Seed to Stall: Increasing self-sustainability through soilless vegetable farming (Burkina Faso)
Seed to Stall: Increasing self-sustainability through domestic soilless vegetable farming (Burkina Faso)
Soilless farming Ghana (Drip Irrigation)

We cannot achieve our mission in isolation, and we place partnership at the heart of what we do. We have a peer network of like-minded organisations with whom we have shared goals and objectives. Working in collaboration with this community, we increased, developed and broadened our impact and progress towards our mission. During our strategic review process, we identified the need to develop partnerships across the organisation to help us deliver our ambitions of improving our knowledge in areas such as climate and gender equality. In order to meet this objective, we appointed a Partnership Manager in September who is dedicated to identifying and developing the relevant relationships.

Retaining positive and engaged people is significant in Shared Interest’s continued growth and success. We have a team of 36 working across five locations: Costa Rica, Ghana, Kenya, Peru and the UK, speaking 18 languages in total. The majority (58%) have worked for Shared Interest for over four years. We have been supported by 98 volunteers this year, carrying out one or more of six volunteer activities; ambassador, community supporter, event assistant, translator, data entry and researcher.

Following almost two years of working from home, our Newcastle office re-opened on 14th March with a new hybrid model. Our regional offices were closed at the same time and colleagues have chosen to work permanently from home. In August 2022, we circulated the online Engagement Survey with a response rate of 94.4%. The results showed a positive move in engagement levels, with all 34 respondents either ‘engaged’ (36.5%) or ‘actively engaged.’ (63.5%).

We consider stewardship in all aspects of our work and embed a culture of good environmental practice throughout Shared Interest, doing the best we possibly can with the resources entrusted to us. Our Environmental Team raises awareness of topical issues and encourages eco-friendly initiatives.

We know that our producers and buyers had already been affected at different stages of the pandemic and Covid-19 but the current global economic climate has severely impacted our customers who have have seen costs rise quickly alongside disruption in transport networks, shortage of containers worldwide and changing consumer patterns.

In total, we have 185 customers, consisting of 165 producer groups (2021: 175), 76 in Latin America, 88 in Africa, and one in Asia, and 20 buyers (2021: 25) 13 in Europe and seven in North America. The majority of our finance was lent on a short-term basis, helping with the purchase of raw materials, also known as inputs, and providing an income to farmers and artisans before the harvest or production of goods.

In terms of lending, coffee remains our largest focus, mainly due to the scale of Fairtrade coffee production, with more than half of all Fairtrade certified producers growing this commodity. Rising coffee prices and volatility within the coffee market meant that producer groups required additional financing to meet customers need in response to the market fluctuation for the same volume previously exported. Consequently, we saw an increase of 2.3% in our lending to support coffee, representing 49.4% of our total disbursement (previously 47.1%). Although other CSAF members have recorded an increase in cocoa lending, our disbursements for this commodity have reduced from 28.3% in 2021 to 21.7% in 2022. Handcraft and textile products continue to have an important place in our lending as we maintain our focus on small and disadvantaged producer groups. It is important to note that disbursements for handcrafts are made mostly through buyer lending. Therefore, the increase seen from 8% in 2021 to 12.5% in 2022 is due to higher purchases from buyers as retail shops reopened and demand for handcraft items increased.

During 2022, a total of £51.9m funds were disbursed compared to £52.2m in 2021. As pandemic restrictions were lifted, buyers started to increase their orders resulting in higher disbursements. Although a small number of producers requested additional prefinance, there was an overall decrease as the number of producers in our portfolio has reduced by ten and shipping delays meant funds were requested later, or borrowing was extended for a longer period and finally, some producer groups accessed funds with a lower interest rate from alternative financial sources. Of the total payments made on behalf of buyer customers, a large proportion (43%) went to Asia. Due to political and economic constraints, it is not possible to lend directly in some of these regions, therefore our relationships with buyers are essential in reaching disadvantaged communities here. During this financial year, it has been difficult to increase our customer portfolio. Nevertheless, seven new proposals were approved, along with 18 increases for existing customers.

To ensure we keep up to date with regional challenges we hold Producer Committees each year. Customers from various sectors come together and this year, many stated that one of the main advantages of accessing finance from us was the speed of disbursements. It was also recognised that Shared Interest was able to accept the additional risk in lending to co-operatives with a limited credit record. They also valued our excellent customer service, our strong relationships with cooperatives, and the flexibility we have shown in working with new buyers.

In South America, some producers highlighted that they were working on projects to diversify income streams for their members. In East Africa, one coffee producer constructed a new coffee washing station, which helped to increase their production. In West Africa, a handcraft producer in Ghana had improved their business operations and product range, which enabled them to expand into new markets and increase their orders. In Ivory Coast, one cocoa producer explained that they had Baluku Aminadu is a member of BOCU in Uganda. Akolgo Abaah holds harvested vegetables grown using soiless farming. 65 | P a g e been able to improve their cocoa processing and grading facility. In Central America, a Honduran coffee co-operative continued their investment programme with a new processing infrastructure, boosting their overall production capacity, giving them more operational control and strengthening their relationship with buyers. A Mexican honey trader finished building their new production plant, increasing their capacity and ability to acquire honey from more small-scale beekeepers.

Our regional teams and customers all noted significant challenges brought about by climate change. In South America, the changing weather patterns have affected coffee yields and quality and the coffee harvest season has reduced from 4-5 to 3-4 months. Producers highlighted the greater instances of crop disease, alongside deterioration in road conditions. In addition, coffee can no longer be grown at lower altitudes, in some parts of Peru, due to temperature changes. This has led to the migration of coffee plantations to higher ground, leading to deforestation. In Central America, the honey harvest season has shortened from six months to two months and the number of overall honey harvests decreased from four to two per year. In East Africa, producers are implementing innovative solutions but are struggling with the costs. One coffee producer in Rwanda is educating its farmers in mulching practices and the importance of growing shade trees. Another coffee producer located in Uganda, is planning to adopt a hybrid solar drying method for their coffee because they are in a region that receives heavy rainfall. In West Africa, climate change has led to erratic rainfall patterns, droughts and extreme temperature situations affecting flowering and harvest seasons. Overall, they have seen a 25-30% reduction in yields in Ghana’s major cocoa season during 2021/2022.

Despite the challenges faced during the last 12 months, Shared Interest has continued to empower smallholder farmers and artisans to grow their businesses sustainably, increase trade, and create employment opportunities by providing a reliable source of finance during otherwise uncertain times. Even in this year’s difficult conditions, we supported 388,320 farmers, artisans and workers, 33% were women, across 45 countries this year.

You can read the full Social Accounts document here.

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