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Financial stewardship

Financial controls: Significant emphasis is placed on robust financial controls14. Our internal controls are regularly reviewed, updated and audited. This year’s audits again raised no issues.

Procurement: We also follow a documented approach to procurement. This ensures that, as far as possible and practical, we source products and services that are fair trade, environmentally friendly, and/or locally produced.        

Lending: Our lending decisions are made within credit policies, which help in managing our exposure to risk. Prudential lending limits specify the proportion of our Share Capital, which can be lent by commodity, country risk category, region and product. Revisions are made on the basis of evidence gained from lending and careful consideration of relevant risks. These limits are approved by the Board of Directors. The annual statutory financial accounts, as well as the presentation given at the AGM, provide further details of the management of risk by Shared Interest and in particular, the management of credit risk (defaults) arising from customers who have borrowed from the Society and are unable to repay Shared Interest when due.    

Liquidity and investment: The majority of our £46.1m in Share Capital is deposited in GBP with our main banker, Santander UK plc.         

Fundraising ratios: In addition to the Share Capital of Shared Interest Society members, we manage donations made to Shared Interest Foundation. In order to do this efficiently and effectively, we monitor two key ratios. Management costs as a percentage of charitable expenditure were this year 38% (2019: 28.78%) and fundraising costs as a percentage of income were 3.6% (2019: 9.07%).

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