Growing rural prosperity for family farmers
Small agricultural enterprises and cooperatives can be powerful engines of prosperity. When they grow and thrive, the hundreds of smallholder farmers that produce for them become more prosperous and resilient. That's because these enterprises don’t just supply vital inputs, they act as catalysts for change, introducing climate-smart practices, investing in local infrastructure, connecting family farmers with larger markets and strengthening their rural populations with jobs, training and higher incomes. Following an initial 3-year grant, we’re renewing our support for Root Capital in Peru to provide tailored critical financing and technical assistance to 95 rural cooperatives, which will positively impact the lives of approximately 30,000 small-scale farmers.
Globally, more than 2.5 billion people rely on small-scale farming for their livelihoods, including the two million families in Peru who make their livings on farms of less than 10 hectares. With limited resources, little land and poor access to markets, they operate on razor-thin margins and are the first to be impacted by climate shocks.
Root Capital’s credit-plus-capacity model grants loans to rural enterprises that are too big for microfinance but generally too small and risky to secure credit from conventional commercial banks, falling into the so-called “missing middle”. This financial assistance comes with agronomic training and financial advice on how best to use the loans, supported by critical market connections.
With tailored support, these rural enterprises, mostly cooperatives, become engines of prosperity for their supplier base. As the enterprises grow and thrive, the hundreds of smallholder farmers that produce for them become more prosperous and resilient. That’s because the enterprises don’t just supply these farmers with vital inputs, they act as catalysts for change, introducing climate-smart practices, investing in local infrastructure and creating stable links between the farmers and global markets, while strengthening their rural populations with jobs, training and higher incomes. In other words, they champion sustainable development that increases productivity while stewarding natural resources.
Following an initial 3-year grant, we’re renewing our support for Root Capital.
- 95 rural enterprises will be provided with the resources, information and capacity they need to fuel their growth.
- Approximately 30,000 smallholder farmers will improve and stabilize their livelihoods.
Equipped both with crucial credit and the capacity to leverage it for maximum impact, the rural enterprises supported by Root Capital grow by 20% per year on average. They are able to make targeted, longer-term investments in the quality, reliability and sustainability of their supply chains. These investments in turn improve their competitiveness and profitability, and help them build stronger relationships with buyers and other value chain stakeholders, with long-term positive impacts on enterprise growth and farmer livelihoods. Half of them are able to access commercial financing after just three years of working with Root Capital.