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Reaching the
“Missing Middle”
in Rural Finance
The “missing middle” are the
businesses that are too large to
access credit from microfinance
institutions but considered too
small to secure financing from
commercial banks. Founded in 1999,
Root Capital, Inc. is a nonprofit
development financier that provides
loans and financial training to farmer
aggregators, cooperatives and
agricultural SMEs in Africa and Latin
America to address the funding
needs of the “missing middle”.
INVESTMENT IN ROOT CAPITAL
IFC has provided an investment consisting of a senior loan
The G20 established the Global Agriculture
and Food Security Program (GAFSP) to fund
public and private investment in agriculture
in low-income countries.
GAFSP’s private
sector window, managed by IFC, a member
of the World Bank Group, offers long- and
short-term loans, credit guarantees, equity and
advisory services to fund private investments
that
promote
agricultural
development
and food security in low-income countries.
package of $10 million to Root Capital. The funding will help
the company achieve greater economies of scale, continue
its progress toward becoming a self-sustaining financial
institution, and enable it to reach more underserved farmers and
businesses.
For more information
about IFC and GAFSP
please visit
www.ifc.org
www.gafsp.org
CONTACTS
EXPECTED DEVELOPMENT RESULTS
Laura Mecagni
IFC’s investment in Root Capital is expected to reach approximately two million
Head
more farmers over the next five years. By significantly expanding Root Capital’s
[email protected]
lending, the project will positively impact the gap between microfinance and
commercial banking, especially in rural areas in Africa. The project aims to make
Bradford Roberts
a case for sustainable and climate friendly agriculture in difficult markets and
Sr. Operations Officer
catalyze private sector funding to support Root Capital as it gradually transitions
[email protected]
itself to become a more financially sustainable institution.
IFC’s investment will support an innovative financial intermediation business
Niraj Shah
model that targets underserved market segments including bottom-of-the-
Sr. Investment Officer
pyramid clients and small scale rural farmers. This is expected to have strong
[email protected]
demonstration effect and the potential for other institutions serving this market
segment to replicate their business model.
IFC’s knowledge and experience in corporate governance and environmental and
social standards will play a key role in helping Root Capital spread its corporate
governance and E&S standards, thereby supporting long-term sustainability.