IFC, GAFSP Invest $10 million in Root Capital to Support Small Farmers in Africa, Latin America
Tuesday, January 15, 2013
Washington, D.C. – IFC, a member of the World Bank Group, and the private sector window of the Global Agriculture and Food Security Program (GAFSP) will invest $5 million each in Root Capital to help expand access to working capital and markets for 300,000 farmers over the next four years.
Root Capital is a social investment fund working with small- and medium enterprises and farmers’ cooperatives in over 30 low-income countries. The $10 million investment from IFC and GAFSP will support Root Capital’s expansion into new commodities and new markets in Africa, growth which will help the company achieve greater economies of scale and continue its progress toward becoming a self-sustaining financial institution.
“By financing agricultural cooperatives and small businesses in low-income countries, Root Capital is helping farmers—many of them women–transition from subsistence to commercial food production,” said IFC Executive Vice President and CEO Jin-Jong Cai. “Farmers are gaining access to global supply chains, increasing their incomes, and contributing to global food security.”
Willy Foote, Root Capital CEO and Founder said: “This financing will help Root Capital scale its business model, and takes us one step closer to achieving our goal of catalyzing a market for smallholder agricultural finance that will unlock opportunity for 500 million farmers living on less than $2 a day.”
Helping small farmers gain access to finance, agricultural inputs like seeds, and improved infrastructure is part of IFC’s strategy for improving food security and rural incomes. IFC more than doubled agriculture-related investments to $4.2 billion in fiscal year 2012.
GAFSP is a multilateral mechanism to assist in the implementation of pledges made by the global community to support country-led investment plans in agriculture and food security. Following commitments by G-8 leaders at the L’Aquila Summit in July 2009 and reaffirmed by the G-20 Summit in Pittsburgh in September 2009, GAFSP was established in April 2010. The program is composed of two windows: the Public Sector Window administered by the World Bank and the Private Sector Window managed by IFC. The Private Sector Window supports private initiatives to improve productivity and sustainability in agriculture and improve market access and access to finance to the agribusiness sector in low-income countries. For more information, visit http://www.gafspfund.org.