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`Organic' bank goes for growth

Isabel Berwick Personal Finance Editor
Saturday 17 April 1999 18:02 EDT
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SAVERS ARE rushing to deposit cash in Britain's first "organic" bank account. More than pounds 4.6m has been invested with Triodos, the UK's only "green" bank, and the figure is expected to rise by at least 50 per cent by the end of the year.

Since January, business has risen by 13 per cent and the boom is set to continue on the back of concern over genetically modified food. Savers put their cash into the account, earning interest comparable with a traditional building society. The difference is that the "organic" money is used for business loans to small farms and organic food companies.

Triodos profits by lending the cash at a higher interest rate than it pays to savers. So far it has lent money to farms, organic produce "box" delivery schemes, and restaurants.

Savers receive a newsletter three times a year, listing all the business loans. Triodos believes there is a huge demand from the public to see where their money is spent. The bank's commercial director, Simon Roberts, said: "We hope savers will start to buy food which has been produced by the organic enterprises financed by their savings."

The account is run in partnership with the Soil Association, which promotes organic farming and runs an organic food licensing operation. The association receives 0.25 per cent of the total in the Organic Saver account each year.

Demand for organic food is rocketing and last week the Government announced it plans to double the subsidies paid to farmers who convert their land to organic farming. Around pounds 6m will be available this year, rising to pounds 9.5m in 2001-2. But many organic producers and distributors find it hard to raise a business loan from conventional banks. Triodos Bank will give loans only to projects with a social, environmental or ethical benefit. "We probably lend where other banks fear to tread, but we don't subsidise lending as it's important the businesses are commercial operations," Mr Roberts said.

Organic Saver Account, tel: 0500 008 720

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