Who we lend to

We continue to support fair trade organisations through direct producer lending in Africa and Latin America (producer lending) and indirect lending to Northern Hemisphere fair trade wholesalers, FLO Traders (companies who sell unfinished Fairtrade products, raw materials and ingredients to other Fairtrade registered companies who are either also acting as traders or are licensees making a final Fairtrade product), and retailers (buyer lending).

Our lending solutions

Our lending portfolio comprises short-term solutions including Export Credit, Buyer Credit and Stock Facilities for working capital, alongside medium-term Term Loans for infrastructure and equipment investment.

Export and Buyer Credit

Export Credit and Buyer Credit are revolving lines of credit tied to contractual agreements, which are repaid as contracts are fulfilled. This provides us with the flexibility to offer loans over the course of a year meeting the differing peaks of regional harvest seasons, which allows us to exceed the total of our Share Capital.

Stock Facilities

Stock Facilities provide financing when contracts are not available during critical harvest periods. This is because not all customers borrow at the same time due to the different harvest periods across regions.

Term Loans

Term Loans are essential for supporting customers’ infrastructure projects, enabling them to acquire the materials and machinery needed to expand production capacity. These loans also help with the construction of buildings that support long-term growth.

Our lending portfolio

Our current portfolio encompasses 204 facilities allocated to 166 customers with short-term financing via Export Credit remaining the most popular borrowing option (as demonstrated in the graph below).

The majority of our lending (89%) supports producer groups. However, buyer lending remains crucial in the fair trade system, as WFTO Fair Trade Principles require them to provide 50% upfront payments to producers.

Financial regulations prevent direct lending in many parts of Asia, including India, Bangladesh, Nepal, and Pakistan. Instead, we facilitate producer access to working capital by extending credit to European and North American buyers, enabling them to pay artisans and procure raw materials, ensuring timely order fulfilment.

Click here to read the full Social Accounts document.