The Need
Since its launch, Root Capital has provided more than $200 million in credit to 282 small and growing businesses in 30 countries in Latin America and Africa with a 99% repayment rate from our borrowers and a 100% repayment rate to our investors.
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The Missing Middle
Small grassroots businesses—such as coffee farmer cooperatives and artisan associations—are engines for sustainable development
and poverty alleviation in rural communities in the developing world. Considered too small and risky for mainstream banks and too large for microfinance, these grassroots businesses are caught in the “missing middle”; they cannot access the capital they need
to grow and sustain their operations.
Root Capital addresses this market failure through an innovative lending model that serves the needs of these remote grassroots
businesses. We are creating a new class of capital sitting between microcredit and commercial lending, enabling rural
communities to unlock wealth and build sustainable livelihoods.
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Poverty and the Environment
The majority of the 2.6 billion people surviving on less than $2 per day live in rural areas. Without viable
alternatives, the rural poor often pursue short-term moneymaking strategies, such as slash-and-burn agriculture and illegal
logging. These practices trigger a downward spiral of environmental destruction and desperate poverty.
By supporting grassroots businesses that value environmental stewardship, Root Capital is strengthening sustainable livelihoods
and transforming rural economies in poor, environmentally vulnerable places.
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Conscious Consumers
Increasingly, consumers are demanding sustainably-grown, ethically-sourced products like Fair Trade coffee and organic cotton.
Many consumers will pay a premium to help the planet and people in the developing world. But without access to finance, rural
communities are unable to capitalize on this booming demand for their specialty products.
Root Capital provides grassroots businesses with capital, financial training, and connections to these emerging ethical supply
chains. This creates economic incentives for poor rural producers to engage in environmentally sustainable and socially
responsible practices.
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