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We continue to support fair trade organisations through direct producer lending in Sub-Saharan Africa and Latin America, and indirect buyer lending to Northern Hemisphere fair trade wholesalers, FLO Traders (companies that sell unfinished Fairtrade products, raw materials and ingredients to other Fairtrade traders or licensees producing final Fairtrade goods) and retailers.

As defined in our ToC, our work contributes vital support in areas marked by a massive, chronic shortage of funding. Disadvantaged rural communities face a specific, critical threat: a recent analysis reveals that the annual finance gap for the world’s smallholder farmers, who produce nearly 30% of global food, is an enormous $228bn. Furthermore, one UN report found that developing nations require 12 times more finance to prepare for climate impacts.

Producer groups remain our primary focus, representing 89% of facilities. Our portfolio currently comprises 200 facilities (2024: 204) allocated to 165 customers (2024: 166). Export Credit remains the most popular borrowing option. At the end of this year, our customer base consisted of 149 producer groups (2024: 147) and 16 buyers (2024: 19). Producer groups are spread across Latin America (74), Sub-Saharan Africa (74) and Asia (1), while buyers are located in Europe (10) and North America (6). 

The overall reduction reflects the closure of 11 accounts due to poor management, market volatility, leadership instability, financial underperformance, reluctance to provide security, more attractive competitor rates, and, in some cases, insolvency. 

Ten new customers were onboarded, challenged by sector-specific limitations, incomplete financial documentation, high perceived interest rates and multiple lender engagement by prospects. Closed accounts exceeded new additions, resulting in a net reduction in the portfolio.

Our lending ranges from short-term working capital facilities (Export Credit, Buyer Credit, Stock Facilities) to Term Loans for infrastructure and equipment.

Export Credit and Buyer Credit are revolving credit lines linked to contractual agreements, repaid as contracts are fulfilled. This approach provides flexibility to align lending with the varying harvest cycles across regions, allowing us to extend financing throughout the year and to exceed the total of our Share Capital.

Stock Facilities provide essential financing during critical harvest periods when contracts are not yet available, recognising that customers’ borrowing needs differ according to regional harvest schedules.

Term Loans enable long-term investment in infrastructure and production capacity, supporting the acquisition of materials and machinery as well as the construction of facilities that promote sustainable growth. (See Appendix 5 for a full description of our lending products).

Debt consolidations (accounts that have defaulted and the debts restructured under new terms), represent 16% of our portfolio, a decrease from 19% last year. While consolidations have historically been concentrated in Sub-Saharan Africa and Latin America, over the past 12 months we undertook two in Europe and North America due to market contractions.

Many of our customers are vulnerable organisations operating on slim margins. They rely heavily on member dedication and buyer commitment to maintain viable market routes. Market challenges often mean agreeing on mutually workable repayment plans takes time.

Buyer lending has declined as customers accessed cheaper credit and faced lower demand for premium-priced products amid the cost-of-living crisis. Nonetheless, buyer lending remains critical; in regions where direct lending is prohibited (such as India, Bangladesh, Nepal and Pakistan), we enable producers to receive timely payments for raw materials and procurement by providing working capital to their European and North American buyers. 

Liberation is an example of a UK-based buyer we have supported with finance, enabling the business to pay smallholder gatherers from countries such as India.

Dan Binks, Liberation Managing Director, said:

“Since Liberation brought the first tranche of Fairtrade nuts to the UK back in 2007, with support from ������ý Interest, the company has purchased over 9,000 tonnes of nuts and dried fruits from smallholder farmers and gatherers around the world.”

Marco Piñatelli, Founder of Inka Moss, said:

“We approached ������ý Interest for finance so that we can pay farmers for their moss on delivery to our factory. The loan has also given us the opportunity to include more remote communities within our supply chain.”

Click here to read the full Social Accounts document.