| A Message From the Founder
Dear Friends,
As we enter 2009, I would like to extend a heartfelt "thank you" on behalf of our entire team. By supporting and investing in Root Capital, you are providing opportunities to small-scale farmers, artisans, and agricultural entrepreneurs around the world, empowering them to lift themselves out of poverty and build healthy, sustainable communities.
In 2008, despite the global economic downturn, Root Capital continued to grow with remarkable results. We increased:
- our direct lending by 49% (from $27.6 million to $41.2 million), while maintaining a 99% repayment rate on our loans and 100% re-payment rate to our investors.
- the number of grassroots businesses we invest in from 106 to 149.
- the number of farmers and artisans we support from 140,000 to 255,000.
- our financial education and training program by nearly 50% to serve 55 businesses.
It's a unique moment in history to reflect on the work that we do. What is happening now in our own troubled economy--the drying up of credit markets--highlights an on-going reality in developing countries. We are witnessing how our economic engine simply grinds to a halt when there is no oil to grease the machinery. To us it's a crisis: the trough in a cycle that most believe will have a painful but foreseeable recovery. To the rural communities, grassroots businesses, and small-scale producers we support in Latin America and Africa, it's EVERY DAY.
EVERY DAY, 2.7 billion people survive on less than $2, with two-thirds of them living in rural areas. EVERY DAY, farmers and artisans around the world pursue short-term moneymaking strategies such as slash-and-burn agriculture and illegal logging. These survival tactics trigger a downward spiral of desperate poverty and environmental degradation. And yet, EVERY DAY, small businesses such as cocoa producer cooperatives and artisan associations--who could deliver sustainably-grown and ethically-sourced products--are denied the capital and opportunity to grow their enterprises, create more jobs, and ultimately build thriving communities.
At Root Capital, we are committed to investing in small and growing businesses that don't have access to traditional sources of financing, yet have the potential to generate big impact on both poverty alleviation and environmental sustainability. Our current progress towards achieving our mission is truly the result of the unwavering support from the entire Root Capital community and the hard work of our staff.
And so, we enter 2009 sobered by the financial meltdown, yet inspired and motivated by each of you and the strength of our collective will. At a time when our natural instinct is to retrench and focus on our immediate neighbors who are struggling through difficult times, we find clear direction in our common commitment to the rural poor in developing countries who face financial crisis their entire lives. It enables us to keep the long view and strengthens our resolve to bring about systemic change.
In deep gratitude for your continued support,
William Foote,
Founder and CEO
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The story behind your morning coffee...
How are you connected to Rogelio Castillo Herrera, a coffee farmer in Peru?
He may have helped to produce the coffee you drank this morning.
Rogelio Castillo Herrera is a coffee farmer and a member of Central Piurana de Cafetaleros (CEPICAFE). A Fair Trade coffee cooperative in northwestern Peru, CEPICAFE actively promotes organic agriculture and agro-forestry production.e By providing services to agricultural producers like Herrera, CEPICAFE contributes to sustainable development and helps eradicate poverty in Herrera's community.
Root Capital has been lending to CEPICAFE since 2003, enabling the cooperative to provide support and assistance to Herrera and improve his--and 6,459 other members'--standard of living.
"My life has changed significantly since we formed our organization in my village," said Herrera. "Since becoming a member of CEPICAFE, I have had the opportunity to better myself and improve my crops...my income has increased thanks to the sale of our products to Fair Trade markets, and thanks to funding from CEPICAFE. I have had the opportunity to provide higher education to my children, and now we work together in the organization."
With Root Capital's assistance, CEPICAFE competes in high-quality markets, exporting its organic, Fair Trade coffee to well-known buyers in Europe and North America for a better price than its members could get on their own. And these well-known buyers--including Equal Exchange, Royal Coffee and Twin Trading--put Herrera's coffee, perhaps, right into your morning blend.
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Newsflash
Updates from Root Capital
- The Rockefeller Foundation has awarded a $2 million Program Related Investment to Root Capital.
Read the press release
- Our web campaign was a success! Thanks to all of you, we surpassed our goal of raising $50,000 by the end of 2008; we raised a total of $65,000. Thank you for all you do. Our work would not be possible without your support.
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