agents-of-impact | April 13, 2017

Introducing Agents of Impact. First up: Root Capital

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The response to our call last week to ‘name your favorite impact investor’ demonstrated the breadth of the talent pool under the big tent of impact investing. Many respondents ducked the question because they couldn’t pick a single favorite; only a few nominees were named more than once. The responses spanned asset classes and geographies and included both individual leaders and standout organizations.

Rather than choose ourselves, we’re going to roll out your favorites over the next several weeks, in a new feature called Agents of Impact. We’ll even the score soon with your favorite entrepreneurs and others building the impact market. The first Agent of Impact: Root Capital.

Building the market for small farmer finance
In more than a decade as a lender to small farmers and agricultural co-ops in Africa and Latin America, Root Capital has gained a reputation for delivering genuine impact in a tough sector.

A typical loan works like this: A coffee-farmer cooperative gets an order from a buyer for Starbucks. With this contract as security, Root makes a loan to the co-op to buy coffee beans from individual farmers. When the co-op delivers, Starbucks pays Root, which deducts the loan payments and passes the balance to the co-op.

Root has extended about a $1 billion in credit to more than 600 co-ops, small businesses, and other farmer groups, reaching more than 5.6 million farmers and their family members.

Higher prices and better yields mean more money for food, healthcare, and school fees.

Last year alone, Root Capital’s lending helped to unlock $1.2 billion in sales. Its loan portfolio stands at about $84 million. Root’s performance has helped attract banks and financial institutions that now see the once too-risky rural agricultural markets as a lendable opportunity.

Root is backed by the Overseas Private Investment Corporation, the International Finance Corp., Trillium Asset Management Corp., the Calvert Foundation and the Gates Foundation.

This post originally appeared in ImpactAlpha’s daily newsletter. Get The Brief.

Photo credit: Root Capital