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Providing credit to the ‘missing middle’.

450,000 rural households benefited.

While travelling in Mexico in the mid-1990s, William Foote encountered a group of vanilla growers who were unable to secure the credit necessary to allow them access to international markets. Foregoing his place at Harvard Business School, Foote instead returned to Boston and launched the non-profit social investment fund Root Capital in 1999 to lend to small and medium-sized rural businesses in the developing world. Considered too small and risky for mainstream banks and too large for micro-finance, these grassroots businesses are caught in what Foote labels the ’missing middle’. 

The innovative Root Capital model is focused on addressing this market failure and growing prosperity in poor, environmentally vulnerable rural locations in Africa and Latin America by lending capital, delivering financial training, and strengthening market connections for small and growing agricultural businesses. By midway through 2011, the organization had disbursed more than $320 million in credit to 350 businesses (with a 99 percent repayment rate). These loans have improved the incomes of more than 450,000 rural households in 31 countries. 

While heavily weighted towards sustainable coffee and – increasingly – cocoa, Root Capital’s loan portfolio includes handcrafts, ecotourism, fisheries and a wide variety of other sustainable agricultural products that not only improve livelihoods, but also contribute to local food security.

(Photo © Root Capital)