Root Capital, an agriculture-focused non-profit impact investor that focuses on Africa, Latin America and a few Asian countries, has received $35 million in a fresh commitment to support its activities.
The Massachusetts, US-based organization is raising the capital from the US International Development Finance Corporation (DFC), which was previously known as OPIC.
“This financing 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,” the DFC said.
At least half of Root Capital’s lending will help gender-inclusive businesses, thereby advancing women’s economic empowerment.
Small and growing agricultural businesses in low- and middle-income countries are chronically underfunded. Research shows the global financing gap for these rural enterprises in Sub-Saharan Africa alone is over $65 billion, the DFC said.
In Africa, Root Capital is active in the Democratic Republic of Congo, Cote d’Ivoire, Ghana, Kenya, Rwanda, Senegal, Tanzania and Uganda. In Latin America, it works in Colombia, Costa Rica, Guatemala, Honduras, Mexico, Nicaragua and Peru. It is also in the Southeast Asian nation of Indonesia.
Root Capital was founded in 1999 by Willy Foote. It has worked with more than 740 clients, representing 2.3 million farmers and their families and $4.6 billion in economic activity.
It seeks to help enterprises whose credit needs are too big for microfinance and too small or risky for commercial banks. Root Capital provides loans ranging from about $200,000 to $2 million tailored to harvest and sales cycles.