Updated Jan 15, 2021

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Catalytic financing and transformative capacity building for agri-SMEs in the missing middle

Root Capital’s proven "credit-plus-capacity" model pairs the catalytic financing necessary for small-and-growing enterprises to pay farmers on-time for their crops with targeted capacity-building trainings that address specific barriers in their current operations, enabling these enterprises to grow. With growth, these businesses become engines of impact, linking farmers to markets that deliver...
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Root Capital’s proven "credit-plus-capacity" model pairs the catalytic financing necessary for small-and-growing enterprises to pay farmers on-time for their crops with targeted capacity-building trainings that address specific barriers in their current operations, enabling these enterprises to grow. With growth, these businesses become engines of impact, linking farmers to markets that deliver higher, morestable incomes. They also provide agronomic extension, microloans, and access to farm inputs that help farmers adopt practices that increase yields, reduce their environmental footprint, and build resilience to extreme weather events and climate change. Our loans and training help agricultural businesses grow during good times and withstand bad times. Enterprises that borrow from Root Capital over multiple years grow at an average rate of 20-25% per year. This growth enables them to invest in sustainable production methods and improve livelihoods for more farmers.
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MLC Vanguard
  

Stage 5: Scaling

Focus Areas:

Agriculture, Financial Sector & Investment, Resilience and 4 MoreSEE ALL

Agriculture, Financial Sector & Investment, Resilience, Economic Empowerment, Gender Equity, Youth Engagement and Contribution and Climate Change and ResilienceSEE LESS

Implemented In:

Guatemala, Costa Rica, Panama and 17 MoreSEE ALL

Guatemala, Costa Rica, Panama, Mexico, Nicaragua, Colombia, Rwanda, Peru, Ghana, Benin, Senegal, Liberia, Cote d'Ivoire, Sierra Leone, Kenya, Honduras, Uganda, Tanzania, Congo, Democratic Republic of the and IndonesiaSEE LESS

9,900,000
Lives Impacted to Date
20
Countries Implemented In

Problem

Over 2.5 billion people rely on small-scale farming for their livelihoods. Limited resources, land and poor access to markets, mean razor-thin margins. For many, the only viable choice is to migrate in search of a better future. The World Bank estimates growth in the agricultural sector is four times more effective at reducing poverty than other sectors. The driving force is small and growing agricultural enterprises that aggregate hundreds of smallholder farmers and connect them to markets.

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Solution

Root Capital invests in the growth of agricultural small- and medium-sized enterprises so they can transform rural communities in poor and environmentally vulnerable parts of Africa and Latin America and Indonesia. Root Capital’s proven "credit plus capacity" model pairs the catalytic financing these enterprises need to pay farmers on-time for their crops, with targeted capacity building training that addresses specific barriers in their current operations to enable these enterprises to grow.

Target Beneficiaries

Root Capital’s target populations include small and medium sized agricultural enterprises, their employees and supplying smallholder farmers in Latin America, Sub-Sahran Africa, and Southeast Asia. 95% of Root Capital clients operate in areas demonstrating heightened social or environmental vulnerability. 45% of Root Capital's global portfolio is made up of gender inclusive businesses. In 2019, 39% of producers reached through Root Capital services were women.

Mission and Vision

Root Capital's mission is to invest in the growth of agricultural businesses so they can transform rural communities. We envision a future where tens of thousands of small and growing agricultural businesses form the backbone of a thriving agricultural sector that builds prosperous, inclusive, and resilient communities across Africa, Latin America, and Asia.

Competitive Advantage

Root Capital’s integrated "credit-plus-capacity" model allows us to assist small and growing agricultural businesses in a uniquely comprehensive way. Some organizations provide finance to more mature businesses, others give technical assistance to earlier-stage businesses. Only Root Capital addresses both needs at scale. With support from our investors and donors, Root Capital has provided $1.5 billion in loans to over 740 enterprises reaching 2.3 million farm families and provided training to over 1,550 enterprises. In doing so, we have improved incomes and opportunities for 9.9 million people—all in the world’s most remote, marginalized communities.

Planned Goals and Milestones

By 2025, Root Capital will create the blueprint for bankable and resilient agricultural businesses that are sustainable engines of impact. We will: Double our lending portfolio. Strengthen the bankability and resilience of 485 businesses (at least 50% will be gender-inclusive) each year by 2025—reaching 1 million smallholder farmers annually. Pilot innovative financial products and advisory services to address urgent rural challenges, including the youth bulge, climate change, and COVID-19. Catalyze the larger smalholder agricultural ecosystem to adopt this blueprint for rural resilience.

Milestone

Nov 2020
Lives Impacted
5,400,000
Jul 2020
New Product Or Service
Climate Resilience Roadmap
Oct 2004
New Country Implemented In
Colombia and Rwanda
Jul 2000
New Country Implemented In
Guatemala, Costa Rica, Panama, Mexico and Nicaragua
Mar 1999
Created

Supporting Materials

2019-Annual-Report-orientation-null.pdf