Lending to Rural Grassroots Businesses

Our lending model provides access to both the finance and supply chains that allow rural people to build sustainable livelihoods and lift themselves out of poverty. The main security for our loans is future sales contracts from companies like Green Mountain Coffee Roasters, Marks & Spencer, Starbucks, and Whole Foods. When natural products are shipped, the buyer pays Root Capital directly for interest and principal payments. Short of weather issues or other unforeseen circumstances, we can be highly confident that our loan will be repaid. By moving beyond traditional approaches to collateral, we are proving the business case for lending to the rural ‘unbankable’ through intelligent use of supply chains that redefines risk across rural finance in developing countries. In addition to short-term working capital loans, Root Capital also provides longer-term credit for capital investments, such as processing equipment, drip irrigation, agricultural applications of renewable energy technologies, and farm refurbishments to increase organic production yields.

Factoring Model


1. Order goods
2. Make loan with purchase order as collateral
3. Ship goods
4. Pay for goods
5. Remit payment, net of loan principal and interest

Financial Education & Training

Our financial education program trains managers and elected leaders of rural cooperatives in financial management and basic business skills. The goal is to equip leaders of farmer and artisan associations with basic skills to build their businesses and work effectively with their members, buyers, and financial institutions. The training targets both new clients and existing borrowers in order to accelerate their organizational development, prepare them for initial and larger capital infusions from Root Capital, and make them attractive clients to local financial institutions. Our approach includes building bridges to local banks and actively drawing them into rural financial markets.