Root Capital Tops $500 Million in Cumulative Lending to Rural Enterprises in Africa and Latin America
Thursday, March 28, 2013
CAMBRIDGE, MA (March 28, 2013) The nonprofit agricultural lender Root Capital announces today that it has hit a major milestone, topping $500 million in cumulative lending to more than 425 small and growing businesses providing some 750,000 small-scale farm families (3 million individuals) with better livelihoods in poor, environmentally vulnerable locations in Africa and Latin America.
Founded in 1999, Root Capital accomplished 80 percent of the $500 million in lending in just the last four years, and is on a trajectory to lend another $1 billion over the next five years. It maintains a 98 percent loan repayment rate from clients and a 100 percent repayment rate to its investors.
“Our $500 million in lending is empowering 425 rural enterprises to become engines for economic growth in some of the world’s poorest areas in the Americas and sub-Saharan Africa, says Willy Foote Root Capital Founder and CEO. “It’s enabling some 3 million people to lead more productive lives filled with greater hope and dignity.”
Globally, some 450 million smallholder families live on less than $2 a day and lack access to the finance and global markets that could lift them out of poverty. A recent report by Dalberg Global Development Advisors pegs the market need at $450 billion.
“The need to serve these 450 million farmers is enormous,” says Sally Osberg, president and CEO of the Skoll Foundation. “Root Capital’s milestone shows how much headway they are making.”
Root Capital provides loans, ranging in size from $50,000 to $2 million, and financial management training to small and growing agricultural businesses that aggregate the products of these smallholder farmers. Too large for microfinance but too small for commercial credit these businesses serve as anchor institutions in remote areas of the developing world, while providing a resilient and sustainable supply source for global buyers like Starbucks, Whole Foods and The Body Shop.
“Root Capital is celebrating this momentous occasion, but recognizes the hard work that lies ahead,” says Jeremy Mindich, Root Capital Board Chair andcofounder of Scopia Capital, an alternative investment fund management firm with $3 billion in assets under management. “The whole organization is deeply focused on scaling its impact over the next five years by expanding its own operations and by catalyzing a larger financial market to serve the world’s poorest farmers.”
To encourage other lenders to get into the market, Root Capital is committed to assessing and reporting on its social and environmental and impact. It released today its Roadmap for Impact, in depth client case studies, and visual “Impact Snapshots” that convey core themes about its impact on small and growing businesses and on farmer livelihoods.
“Through its inspiring mix of creativity and discipline, Root Capital is demonstrating the power of impact investing—that for-profit loans can complement donations and government action to help uplift communities in some of the world’s most vulnerable regions. Beyond the $500 million it has lent itself, Root Capital is helping to shape and lead the impact investing sector through its commitment to impact measurement, transparent communication, and collaboration” says Antony Bugg-Levine, CEO of the Nonprofit Finance Fund and co-author of Impact Investing.
About Root Capital:
Root Capital, www.rootcapital.org, is a nonprofit agricultural lender that grows rural prosperity in poor, environmentally vulnerable places in Africa and Latin America by lending capital, delivering financial training and strengthening market connections for small and growing agricultural businesses. Root Capital is an ImpactAssets 50 fund and ranks #12 on the Global Journal’s Top 100 NGOs list. Root Capital’s clients produce dozens of different agricultural products, from coffee, cocoa, and cashews, to fresh fruits and vegetables, to wild-harvested products like natural gums and shea butter. For specific client examples, see:http://www.rootcapital.