AFRICA – Root Capital, a nonprofit impact investor offering farmers around the world a path to prosperity, has receives US$35 million support from the U.S. International Development Finance Corporation (DFC).
The investment will provide financing to small and growing agricultural businesses in sub-Saharan Africa, Latin America, and Southeast Asia.
This will help break the cycle of rural poverty, reduce food insecurity, and increase environmental sustainability, while responding to the COVID-19 related challenges facing smallholder agriculture.
It will also advance women’s economic empowerment, with at least 50 percent of Root Capital’s lending benefiting gender-inclusive businesses.
“DFC’s investment in Root Capital’s agribusiness impact financing is a fantastic example of our unique mandate to leverage private sector capital to foster incredible development impact and economic growth, in communities that are often overlooked by traditional investors,” said DFC’s Vice President for External Affairs and Head of Global Gender Equity Initiatives Algene Sajery.
“The financing provided by Root Capital will help thousands of smallholder farmers across the globe, many of whom are women, to improve their livelihoods, tackle food insecurity in their communities and advance climate resilient agricultural practices,” highlighted Algene.
Small and growing agricultural businesses in low- and middle-income countries are chronically underfunded.
Research shows that the global financing gap for these rural enterprises is in the hundreds of billions of dollars—at least US$65 billion in sub-Saharan Africa alone.
“The financing provided by Root Capital will help thousands of smallholder farmers across the globe, many of whom are women, to improve their livelihoods, tackle food insecurity in their communities and advance climate resilient agricultural practices.”DFC’s Vice President for External Affairs and Head of Global Gender Equity Initiatives – Algene Sajery
By taking steps to close this financing gap, DFC investments can help improve rural livelihoods and transform communities.
“This investment allows Root Capital to reach the most impactful, underserved rural businesses while mitigating risks inherent to the agricultural sector.
“These are businesses that, with the right resources, can improve the livelihoods of more than a million farming families. We are a proud, long-time partner of DFC and immensely grateful for their transformative support,” said Root Capital’s Chief Financial Officer, Bryan Woliner.
In East Africa, DFC’s investment will assist Root Capital with helping farmers in Uganda adopt climate-smart agricultural practices, as well as providing coffee farmers in the Democratic Republic of Congo with the tools they need to overcome financial instability and rebuild after years of civil war.
While in Latin America, this investment will support Root Capital’s financing to smallholder farmers adapting to climate change and using farming as a means to boost local incomes in the face of poverty and violence.
In Southeast Asia, DFC’s financial support will promote gender equity in Indonesia’s coffee industry by supporting women-led and gender-inclusive cooperatives, including one that produces a line of wholly women-grown coffee.
Root Capital grows rural prosperity by lending capital, delivering business management training, and strengthening market connections for small and growing agricultural businesses.
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