DFC Improves Rural Livelihoods and Empowers Women through $35 Million Investment in Root Capital

 

Financing will enhance gender equity and support rural communities around the world

 

WASHINGTON – U.S. International Development Finance Corporation (DFC) today announced $35 million in investment support to Root Capital, a nonprofit impact investor headquartered in Massachusetts that offers farmers around the world a path to prosperity. DFC’s investment will provide financing to small and growing agricultural businesses in Latin America, sub-Saharan Africa, and Southeast Asia. This financing will help break the cycle of rural poverty, reduce food insecurity, and increase environmental sustainability, while responding to the COVID-19 related challenges facing smallholder agriculture. It will also advance women’s economic empowerment, with at least 50 percent of Root Capital’s lending benefiting gender-inclusive businesses.

Small and growing agricultural businesses in low- and middle-income countries are chronically underfunded. Research shows that the global financing gap for these rural enterprises is in the hundreds of billions of dollars—at least $65 billion in sub-Saharan Africa alone. By taking steps to close this financing gap, DFC investments can help improve rural livelihoods and transform communities.

“DFC’s investment in Root Capital’s agribusiness impact financing is a fantastic example of our unique mandate to leverage private sector capital to foster incredible development impact and economic growth, in communities that are often overlooked by traditional investors,” said DFC’s Vice President for External Affairs and Head of Global Gender Equity Initiatives Algene Sajery. “The financing provided by Root Capital will help thousands of smallholder farmers across the globe, many of whom are women, to improve their livelihoods, tackle food insecurity in their communities and advance climate resilient agricultural practices.”

"This investment allows Root Capital to reach the most impactful, underserved rural businesses while mitigating risks inherent to the agricultural sector,” said Root Capital’s Chief Financial Officer, Bryan Woliner. “These are businesses that, with the right resources, can improve the livelihoods of more than a million farming families. We are a proud, long-time partner of DFC and immensely grateful for their transformative support."

In Latin America, this investment will support Root Capital’s financing to smallholder farmers adapting to climate change and using farming as a means to boost local incomes in the face of poverty and violence. In East Africa, DFC’s investment will assist Root Capital with helping farmers in Uganda adopt climate-smart agricultural practices, as well as providing coffee farmers in the Democratic Republic of Congo with the tools they need to overcome financial instability and rebuild after years of civil war. In Southeast Asia, DFC’s financial support will promote gender equity in Indonesia’s coffee industry by supporting women-led and gender-inclusive cooperatives, including one that produces a line of wholly women-grown coffee.

Root Capital grows rural prosperity by lending capital, delivering business management training, and strengthening market connections for small and growing agricultural businesses, and has become a global leader of gender lens investing in agricultural enterprises. The organization has committed to providing more than 50 percent of financing to benefit gender-inclusive and women-led businesses, advancing DFC’s 2X Women’s Initiative to invest in women around the globe.

 

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U.S. International Development Finance Corporation (DFC) is America’s development bank. DFC partners with the private sector to finance solutions to the most critical challenges facing the developing world today. We invest across sectors including energy, healthcare, critical infrastructure, and technology. DFC also provides financing for small businesses and women entrepreneurs in order to create jobs in emerging markets. DFC investments adhere to high standards and respect the environment, human rights, and worker rights.