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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.