The Nature of The Financial Requirement
International trade and production involves long processes which take much time. For example, many months elapse between the sowing of a crop in the tropics and the final purchase by a consumer of a finished product in a European supermarket. The money laid out at each stage of production and distribution is called working capital. For smaller producer organisations to access international markets on terms consistent with their independence, if at all, requires access to working capital, by both producers and fair trade distributors, beyond what is available from banks. Normally this extra working capital would come from profit-maximising shareholders in some form or from accumulated past profits. Shared Interest provides unsecured finance, similar to trade credit. Shared Interest can do this only because its own members are prepared to accept the risk of loss on their investment in Shared Interest, and to accept the limited and currently lower financial returns resulting from the high costs of dealing with emerging organisations in the Global South.
Read more about this topic: Shared Interest
Famous quotes containing the words nature, financial and/or requirement:
“Nothing in the nature around us is evil. This needs to be repeated since one of the human ways of talking oneself into inhuman acts is to cite the supposed cruelty of nature.”
—John Berger (b. 1926)
“A theory of the middle class: that it is not to be determined by its financial situation but rather by its relation to government. That is, one could shade down from an actual ruling or governing class to a class hopelessly out of relation to government, thinking of gov’t as beyond its control, of itself as wholly controlled by gov’t. Somewhere in between and in gradations is the group that has the sense that gov’t exists for it, and shapes its consciousness accordingly.”
—Lionel Trilling (1905–1975)
“The first requirement of politics is not intellect or stamina but patience. Politics is a very long run game and the tortoise will usually beat the hare.”
—John Major (b. 1943)