Message from the CEO
Thanksgiving is a time to celebrate the abundance of the harvest and family togetherness. Yet, even as we celebrate, many people in Africa and Latin America go hungry. According to the United Nations, more than 200 million Africans and 50 million Latin Americans routinely do not have enough to eat. In 2011, severe drought has pushed millions more Africans to the brink of starvation. Widespread hunger is driven by poverty and lack of access to reliable, affordable food supplies in many parts of the world.
Since Root Capital’s inception, we have worked to address one of the prime causes of food insecurity: rural poverty. We do that by providing credit and financial training to small and growing businesses that, in turn, improve livelihoods for small-scale farmers. We have been successful at this and we are proud of the impact our team is having in rural Africa and Latin America.
Yet, we see the need to do more—to build upon our work promoting sustainable livelihoods through exports like coffee, and cocoa and to invest in agriculture systems that feed local populations. Initial pilot loans over the last year have confirmed that our approach to agricultural lending can help meet the demand for credit among businesses sourcing from small-scale farmers that produce and process nutritious foods for local markets. As we transition from a pilot stage, we’ve developed a two-pronged lending strategy that will maximize our impact across agricultural value chains.
First, we seek to achieve scale and financial sustainability. Our “Scale and Demonstrate” strategy comprises our existing core lending, and will now be called the Sustainable Trade Fund (STF). The STF focuses on enterprises that export natural products such as coffee, cocoa, nuts, and fresh fruits and vegetables. It includes both short-term working capital loans to finance production and processing as well as longer-term loans for these businesses to invest in necessary equipment and infrastructure.
Second, we continuously push the frontier of rural finance where others have yet to operate. Our “Push the Frontier” strategy takes the form of our new Frontier Portfolios that include loans for activities that we have not historically financed, such as the production of goods for domestic consumption, rather than export. The first Frontier Portfolio is our existing Innovation Fund (which is now the Innovation Portfolio within the Frontier Portfolios). As the lending strategies that we are pioneering in the Innovation Portfolio succeed and begin to scale, they may spin off into their own portfolio—and perhaps eventually grow into the next Sustainable Trade Fund.
Let me give you an example of frontier lending. Freshco, a Root Capital client since 2010, is a Kenyan processor of high-yielding, drought-resistant maize seed used by small-scale farmers. Freshco contributes to Kenyan food security by producing drought-resistant seed varieties that can potentially double a farmer’s yield over traditional seed. See the video below about how Root Capital loans have enabled Freshco to reach 100,000 more farmers with improved seed.
In the coming months, I look forward to sharing more about our new portfolios and other changes that will help strengthen our organization and broaden our impact. Thank you for your support as we work to help build a more prosperous, secure future for rural families in Africa and Latin America.
William Foote, Founder and CEO
VIDEO: How Freshco Grows Food Security in Kenya
“We say in Kenya that if you don’t have maize, you don’t have food,” says James Karanja, co-founder and general manager of Freshco. In a country where people depend on maize for almost 50 percent of their daily caloric intake, a poor harvest can lead to hunger and starvation.
By providing better seed to Kenyan farmers, Freshco is helping to feed a nation in which nearly three million people don’t have enough to eat. Watch this video to learn about how Root Capital’s loans are helping reach more farmers with high-yielding, drought-resistant seed.
Watch the new video on how Freshco grows food security in Kenya
New and Noteworthy
Root Capital’s Senior Vice President of Business Development and Corporate Relations Liam Brody contributed “A Case Study in Impact Investing” to Americas Quarterly.
Learn about the Social Impact Bond, a promising new tool for applying for-profit capital to urgent social problems, from this video interview with Antony Bugg-Levine, author of Impact Investing.
Root Capital has maintained its top four star rating from Charity Navigator, which recently revised its scoring system. The new system, which resulted in 20% fewer four-star-rated organizations, evaluates Financial Health as well as Accountability and Transparency so that organizations must excel in both areas in order to score well overall. Ken Berger of Charity Navigator explains how the new system rates nonprofits’ impact, governance and operational efficiency.
Join the Team: Executive Assistant to the Founder and CEO
Root Capital seeks applications for an Executive Assistant (EA) to provide administrative support to the Founder & CEO. The Executive Assistant plays a vital role within the organization, ensuring that the Executive Office functions efficiently and liasing gracefully with other departments. In addition to general logistical and administrative support, the EA’s specific responsibilities will include maintaining the CEO’s calendar, managing his travel arrangements, processing expense and budget reports, handling confidential communication and correspondence, and assisting with board relations.
View additional employment opportunities at Root Capital
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