Since its launch, Root Capital has provided more than $120 million in credit to 235 grassroots enterprises in 30 countries in Latin America and Africa with a 99% repayment rate from our borrowers and a 100% repayment rate to our investors.
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.
Finance: Innovating Rural Finance
We lend to small grassroots businesses that are locked out of the local banking system and have few alternatives for affordable credit. We provide financing for both short-term working capital loans and longer-term investments.
For many of our loans, we use future sales contracts from companies like Green Mountain Coffee Roasters, Marks & Spencer, Starbucks, and Whole Foods as a form of collateral. When natural products are shipped, the buyer pays Root Capital directly for interest and principal payments. Because of this factoring model, we can be confident that a loan will be repaid (indeed, our repayment rate is over 99%.) By moving beyond traditional approaches to collateral, we are proving the business case for lending to the rural “unbankable”.
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