| Root in the News
Root Hits Major Milestone
Root Capital celebrates $100 million in disbursements
As of July 31, Root Capital has officially disbursed a total of $100 million in loans. This $100 million is spread across 210 borrowers in 30 countries in Latin America, Africa, and Asia. More importantly, this milestone represents our progress in helping farmers build sustainable livelihoods; since launching our operations in 2000, we have touched the lives of 340,000 small-scale producers, and we are supporting over 2 million
acres of organic cultivation.
And to think nine years ago we were just an idea.
By the end of our first year of lending, we had made nine loans totaling $855,000 to organizations in Mexico, Guatemala, Costa Rica, and Panama - a strong start to pioneering finance for grassroots businesses in the developing world.
 One of our very first borrowers was Manos Campesinas, a Guatemalan coffee cooperative that we still finance today. Manos Campesinas was founded in the 1990s as a result of grassroots organizing by progressive branches of the Catholic Church. When we disbursed our first loan to Manos Campesinas in December 2000, the cooperative represented farmer associations with a total of 620 members. With Root Capital's consistent help, Manos Campesinas has grown steadily and now plays a critical role in the productive activities of over one thousand economically marginalized coffee growers.
Our work in coffee led the way to our success, and still remains an important part of our loan portfolio. But as we have expanded, so has the range of sectors we operate in. The industries we work with now include handcrafts, ecotourism, fisheries, and other sustainable agricultural products. With our recently approved loan of $500,000 to Suma Pacha (see right), we are venturing for the first time into Forest Stewardship Council-certified tropical hardwoods. Yet even as we grow in new directions, we remain committed to the many longstanding partners-from remote cooperatives to well-established corporations-that have been critical to our success. It is thanks to such organizations as Manos Campesinas-which have demonstrated that capital enables them to improve their communities-and thanks to our supporters who have believed in us from the beginning, that we have reached this milestone.
"It's gratifying to see the impact we are having in helping these small and growing businesses succeed," said José Luis Rojas Villarreal, Vice President of Lending, who has been with Root Capital since 2001. "We are excited by our continuing growth because it means there is a strong demand, and that we are meeting an important need. There is still much more to do; we are just getting started." |
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Suma Pacha
 We hit the $100 million milestone thanks to our recently approved loan of $500,000 to Suma Pacha. Already the largest manufacturer of Forest Stewardship Council (FSC)-certified wood in Bolivia, Suma Pacha seeks to become a leading manufacturer and distributor of FSC- certified tropical hardwoods throughout North and South America. This loan marks our induction into a new sector of socially and environmentally sustainable businesses.
Located in El Alto, Bolivia, Suma Pacha (whose name means 'good omen' or 'good harvest' in the local indigenous language, Aymará) produces garden furniture, flooring, and decking. Given that so much of Latin America's exports are raw materials, this organization is unusual in capturing added value by manufacturing its products in Bolivia. The result is increased economic benefits that extend from Suma Pacha's 500 employees to the many indigenous communities that supply the raw materials.
Suma Pacha is also leading efforts to responsibly manage forests by forging alliances with organizations like the World Wildlife Fund, The Nature Conservancy, and Rainforest Alliance. The organization holds a Chain of Custody certificate from the Forest Stewardship Council (FSC), a certifying body that promotes three core principles for forest management: environmental protection, economic viability, and social benefits.
As part of this strong environmental commitment, Suma Pacha has started a Community Forestry Plan, which assists local indigenous communities in obtaining FSC certification. The benefits of this program are two-fold: As Suma Pacha plans to generate more than one-third of its raw materials from Bolivia's community forests in the next five years, the Community Forestry Plan will allow Suma Pacha to purchase the raw materials it needs. At the same time, participating communities will gain a secure market and better prices for their wood. Furthermore, their sustainable forest management practices will ensure that generations to come will benefit from these precious natural resources.
Demand for FSC-certified products currently outstrips supply, particularly for tropical species. Increasingly, consumers are willing to pay more for sustainably harvested wood, but Suma Pacha has been unable to meet this demand because of limited operating capital to buy raw materials. Root Capital's loan will ensure that Suma Pacha has the working capital it needs to buy raw materials and invest in increasing the supply of FSC-certified wood.
As Suma Pacha ramps up its production, large American retailers like Home Depot and Lowe's will be eager and ready. Indeed, Home Depot already buys 73% of Suma Pacha's production.
So the next time you stand on your deck, look down at the wood beneath your
feet. You may be closer to Suma Pacha than you think.
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