Our Approach

Our Approach

Root Capital grows rural prosperity in poor, environmentally vulnerable places in Africa and Latin America. We seek to maximize the positive social and environmental impact of our work through a three-pronged strategy: finance, advise, and catalyze.

  • Overview
    How it Works

    Across the developing world, the rural poor—approximately 75 percent of the 2.6 billion people living on less than $2 a day— are marginalized from the formal economy. Most of these people depend on agriculture as their primary source of income. Without access to capital and viable markets for their crops, millions of small-scale farmers in the developing world are trapped in a cycle of poverty.

    The World Bank estimates that economic growth in the agricultural sector is twice as effective at reducing poverty as growth in other sectors of the economy. Root Capital, an agricultural impact investor, grows rural prosperity in poor, environmentally vulnerable places in Africa and Latin America by lending capital, delivering financial training, and strengthening market connections for small and growing rural businesses.

    Root Capital’s lending is directed towards businesses that are too big for microfinance, but generally unable to secure credit from conventional commercial banks – “the missing middle” of developing-world finance.

  • Finance
    Innovating Rural Finance

    Root Capital provides loans ranging from $50,000 to $2 million to rural small and growing businesses, especially those businesses not currently reached by commercial lenders. Most Root Capital loans can be categorized as follows:

    • Short-term trade credit and Pre-Harvest loans with terms of up to one year that are generally oriented around a harvest or production cycle. These loans are used by borrowers to cover costs of purchasing raw product from their farmer suppliers.
    • Long-term fixed-asset loans with terms of up to five years for investment in equipment and infrastructure.

    Root Capital’s lending supports sustainable environmental practices that protect rural ecosystems. Crops processed and marketed by Root Capital clients include shade-grown coffee and cocoa, farm-grown fruits and vegetables, and wild-harvested products such as shea nuts.

    Root Capital manages two lending portfolios:

    • The Sustainable Trade Fund (STF): Root Capital seeks to scale and demonstrate its lending model. The Sustainable Trade Fund includes loans for businesses that export natural products such as coffee, cocoa, nuts, and fresh fruits and vegetables. Within the Sustainable Trade Fund, we identify and finance early-stage businesses and accompany their growth.
    • Frontier Portfolios: Root Capital seeks to push the frontier of agricultural lending. The Frontier Portfolios include loans for activities such as production of goods for domestic consumption, such as millet, corn, rice, or seed, rather than for export. The Frontier Portfolios also include loans that seek to achieve particularly high social or environmental impact on rural communities, such as improved food security.

    Our Portfolio


    Pangoa is a Fair Trade and organic-certified coffee cooperative located in Peru. Their 207 members are small-scale farmers who cultivate shade-grown coffee, organic cocoa, and honey. Watch a video about Root Capital financing of Pangoa.

    Our Impact

    Our Performance

    Since 1999, Root Capital has disbursed over $900 million dollars in loans to more than 600 businesses. These loans have helped Root Capital clients improve livelihoods for more than 500,000 rural households in Africa and Latin America. Root Capital has maintained a 100% investor repayment rate. View our Performance Dashboard.


  • Advise
    Delivering Financial Training

    Root Capital’s Financial Advisory Services program provides targeted financial management training to current and prospective clients so they have the financial management skills they need to grow and sustain their businesses. Financial Advisory Services prepares small and growing businesses with growth potential to qualify for credit and to mitigate the risk of lending to these businesses.

    Financial Advisory Services provides training on the following topics: accounting, financial planning, financial risk management, financial statement analysis, loan application preparation, and credit management.

    Financial Advisory Services products include:

    • Information seminars that explain Root Capital’s credit products, credit requirements, and training services
    • Diagnostics and workplan workshops that offer comprehensive business process assessment and identify areas for improvement and development
    • Financial training for potential and current clients that focus on developing and improving financial management systems
    • Loan application preparation services for potential and current clients

    Our Portfolio

    Triunfo Verde

    Nestled in the buffer zone of the El Triunfo Biosphere in Chiapas, Mexico, Triunfo Verde is a coffee cooperative that grows organic and fair trade-certified coffee. In 2000, Triunfo Verde was a new cooperative of fewer than 100 members with a young management structure. Today, it has more than 255 members, and it is known for its transparent accounting and management practices. Learn how Financial Advisory Services helped grow Triunfo Verde.


    Our Impact

    Unlocking Growth and Impact

    This video shows how Root Capital's dual strategy of credit plus financial advisory services have helped two Peruvian coffee cooperatives, Chirinos and Aprocassi, to grow their businesses and improve their members' livelihoods.



  • Catalyze
    Creating a Financial Market

    Root Capital seeks to catalyze a thriving financial market to support historically underserved rural small and growing businesses.

    Our Catalyze strategy is to:

    • Innovate: We conduct R&D, study our impact at the household and business levels, and look for ways to increase our impact.
    • Accelerate: We share learning from our work with like-minded peers to build common standards and practices necessary for the industry to thrive and scale.

    Root Capital plays a leadership role in associations of other stakeholders in the rural impact investing space. Through our active participation in groups like the Aspen Network of Development Entrepreneurs and the Global Impact Investment Network, Root Capital helps to draw attention to the market and impact opportunities for sustainable value chain finance; to inspire emulation and replication of both financial, social and environmental elements of our model; and to share lessons from our experience.


    "Closing the gap: Reaching the missing middle and rural poor through value chain finance"

    This article by Brian Milder, Root Capital's Vice President of Strategy & Innovation, focuses on external financial institutions operating in Africa and Latin America that are using innovative approaches to value chain finance to serve both small-scale rural producers and the small and growing businesses that link them to urban and export markets.

    "Global Agricultural Value Chains: Sustainable Growth as a Means for Sustainable Development"

    Featured in the San Francisco Fed's Community Development Investment Review, this article was written by Patricia Devaney, Director of Knowledge & Impact. It discusses Root Capital's model for sustainable economic development, addressing the financing needs of rural small and growing businesses and building agricultural value chains.


    "Impact Investing: Transforming How We Make Money While Making a Difference"

    By Anthony Bugg-Levine and Jed Emerson

    The book charts the path of a new industry, explaining how impact investing is and can be a positive disruptive force.

    "What Microloans Miss"

    This article from The New Yorker (March 17, 2008) explains why small-to medium-sized enterprise finance is important, and how it addresses the gap left by microfinance.

  • Impact Investing

    Our Results
    Since 1999, Root Capital financing has impacted rural businesses, families and communities in more than 30 countries.

  • Strengthening Value Chains

    Working with Partners
    Root Capital clients are trusted suppliers to more than 125 buyers worldwide, including General Mills, Keurig Green Mountain, Starbucks, The Body Shop, and Whole Foods Market.

  • Publications & Resources

    Performance Reports
    Quarterly reports provide information about our portfolio, fundraising efforts, and operating expenses, as well as our social and environmental impact.