Root Capital grows rural prosperity by investing in agricultural small and growing businesses that provide more robust incomes to small-scale farmers. In return, these farmers provide a reliable supply of high quality, sustainably produced crops to the businesses and ultimately to consumers.
Understanding Our Impact
Root Capital’s credit and financial management training enable small and growing businesses (SGBs) to grow and reach more farmers. These SGBs provide farmers higher and more stable incomes by paying them better prices for their crops, improving farm productivity, and providing them steady access to markets. In return, farmers provide a reliable supply of high quality, sustainably produced agricultural product to the businesses, and ultimately to consumers.
Agricultural businesses integrate farmer livelihoods with ecosystem conservation by linking farmers to green markets, providing agronomic assistance on sustainable farm practices, and adopting or helping farmers to adopt clean and appropriate technologies for production and processing.
Root Capital’s impact is best understood on two levels:
- The impacts of our lending and financial management training on clients
- The impacts of our clients on the incomes (and environmental practices) of the small-scale farmers who supply them
Our impact is greatest when we support clients that are growing rural prosperity, and could not do so without access to finance and/or training from Root Capital.
These graphics illustrate core Root Capital impacts—such as the impact of our finance on our clients’ ability to grow, to reach more farm families and to pay higher prices. While some illustrate impact on individual clients, they are representative of the type of impact we see across our portfolio and are based on both portfolio-wide and individual client data from 2011.
Click each snapshot to view individually
How we Measure Impact
We take a two pronged approach to impact assessment: portfolio-wide measurements based on data from the social & environmental due diligence that we conduct with all of our clients, and more in-depth case studies with individual clients.
Portfolio-Wide Social & Environmental Due Diligence
As part of the credit evaluation process for each client, Root Capital’s loan officers use Scorecards to evaluate the client’s social and environmental practices, as well as their ability to access alternate sources of finance. These scorecards include metrics developed by the Impact Reporting and Investment Standards (IRIS), which we report in our quarterly performance reports and Performance Dashboard, but go substantially further in profiling clients' practices.
The scorecards help us to screen out businesses that do not meet a high bar for social and environmental performance, as well as to affirmatively identify how each client’s business, and our support of that business, is expected to create positive impact. Our impact team synthesizes these data to categorize our portfolio of loans by type and depth of impact and to refine the client selection criteria moving forward.
In 2011, we began to supplement our portfolio-wide approach with deeper studies of selected clients to evaluate whether and how our clients support farmer livelihoods, and to inform our understanding of what social and environmental practices create tangible, positive impacts. Our ultimate goal is to demonstrate that lending and financial training for rural SGBs can transform small-scale farmers’ livelihoods while sustaining the environment upon which we all depend.
Download our most recent case studies:
COOPCAB case study
Fruiteq case study
For more information on our approach to measuring impact, read A Roadmap for Impact.