All photos credit: Root Capital
This summer, I traveled to Rwanda for a regional retreat with Root Capital’s Africa Team, followed by several days visiting our clients in the region. It was an insightful journey through the heart of Rwanda’s coffee industry where I explored the captivating landscapes, entrepreneurial innovation, and incredible economic opportunities created and led by agricultural enterprises.
Root Capital’s partnership with Rwanda dates back to 2004 and we take immense pride in having provided $110 million to 71 clients to-date. Most of that lending has been in the coffee sector, and with good reason—the coffee industry is critical to the country’s economy. In fact, approximately eighty percent of foreign income in Rwanda comes through coffee and tea exports. On my trip, I witnessed the strong partnerships that Root Capital has carefully cultivated with our clients within Rwanda’s coffee industry. And now I want to share their stories with you!
My journey visiting clients began in Western Rwanda, the heart of the country’s coffee-growing region. This region is characterized by lush mountains, jungles, and forests. Despite Rwanda’s small size, the hilly terrain and relatively narrow, winding roads made our travels an adventure with four to five hour drives to reach each destination—a trip made longer by frequent flat tires on our van!
The first leg of our journey led us to Kopakama Cooperative, a coffee dry mill that employs approximately 400 people in the community of Mushubati. Kopakama works with 1,444 coffee farmer members, including just over 400 women farmers and more than 190 young growers. Root Capital has provided financing to the cooperative since 2022. We began our partnership with Kopakama by offering them a bankability grant, which they used to invest in office software that allowed them to digitize their operations.
When we sat down with the president of Kopakama, Francois Nkurikiyinka, he passionately explained the struggle they had faced with securing timely funding. Most commercial lenders only made financing available when the coffee season was nearing its end. Yet, for the success of their business, it was essential to access working capital as early as possible in the season to adequately prepare. Working with Root Capital was a game changer for Kopakama. On this visit, it became clear that access to finance is the lifeline that nurtures rural enterprises like Kopakama and allows them to flourish. Traditional lending approaches by commercial banks don’t meet the needs of these small, growing agricultural enterprises, and the lack of other financing options can prevent these enterprises from reaching their full potential. Yet, through Root Capital’s flexible approach, cooperatives like Kopakama are able to access financing that fits their business.
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The next stop on our journey was the Nyampinga Cooperative, a women-led cooperative with 230 members, 97% of whom are women. Located in a remote region of Southwestern Rwanda, Nyampinga operated without electricity back when they first began nearly 20 years ago, pumping water by hand in order to run their coffee washing station. The cooperative has come a long way since their beginnings—they now run on electricity which has enabled a powered coffee washing station (see photo above) and have expanded to include a cupping lab. Nyampinga serves as a vital source of income for around 1,500 farmers from the area.
During a conversation with Agnes Mukamuriza (chair of the cooperative) and Alain Arthur Shema (manager), they expressed their gratitude for Root Capital as a true partner. They emphasized how transformative it had been to collaborate with a lender that not only understood the intricacies of the coffee market, but also acknowledged the unique and nuanced needs of coffee farmers and businesses. The impact of this partnership echoed throughout the Nyampinga Cooperative, a testament to the effects of collaboration and shared growth. Nyampinga started out as a Root Capital advisory services client; they began receiving business management advisory services in 2021, which helped them garner Fairtrade certification in 2022 and secure their first Root Capital loan in early 2023. As a true testament to how far they’ve come since washing coffee by hand nearly 20 years ago, 2023 has been Nyampinga’s most successful year to date, both financially and agriculturally.
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The next day, we headed to Mibirizi Coffee and Food Stuffs Co. Ltd (Micof), a remote coffee washing station tucked away about an hour off-road. Micof is a private business that works with more than 2,950 coffee farming families, processing their coffee beans with care and dedication. Micof, like many of the Rwandan clients we visited, was founded on the notion of being a truly community-oriented business. We observed firsthand how Micof is dedicated to supporting broader community efforts and local solutions through water access projects, coffee tree planting, and offering agronomic assistance to local farmers.
During our time at Micof, we met Cedric Munyura Shema, the managing director and son of the owners of Micof. Micof has been a lending client since 2012, and Cedric credits Root Capital with saving the business during a cash-flow crisis in 2015. When Micof was about to go under, Root Capital stepped in and restructured their loan. In 2019, Micof repaid this loan in full and remains a Root Capital client in good standing to this day.
Cedric also shared their experience with Root Capital’s Talent Partnership program, which places young graduates in accounting, agronomy, and related fields into year-long internships with local agricultural enterprises. Cedric said that, at first, he didn’t really understand the need to have agronomists as part of the business—until they participated in the Talent Partnership program. Now, recognizing the value of these young workers, Micof has hired three of the interns on as paid staff members.
According to Cedric, the interns not only streamlined daily operations but also improved the services that Micof offers to their farmers, adding real value to the business. This year, Micof also welcomed a Digital Business Intelligence (DBI) intern who brought essential business basics, like maintaining Micof’s database and ensuring that the business is reacting to real-time data about local crops, washing station production, and warehouse inventory.
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As our journey came to an end, we visited two more remarkable enterprises: Gasharu and Unguka Muhinzi, both of which have been Root Capital lending clients since 2018. At family-owned business Gasharu, I had the pleasure of speaking with owners Celestin and Marie Rumenerangabo who recounted the early challenges they faced in accessing finance for their business. However, since partnering with Root Capital, access to capital became a pivotal catalyst for their growth and success. What truly sets Root Capital apart for Celestin is our commitment and willingness to look holistically at the whole business and its potential for contracting. He noted: “Root Capital goes on a journey with their client businesses and is not only focused on collateral or the lending part.” To date, in addition to financing, Root Capital has provided Gasharu with an array of advisory services in business management, digital business intelligence, as well as agronomy and climate resilience. These services have helped them secure Rainforest Alliance certification and establish business expansion plans to incentivize local farmers.
On our last day, we traveled several hours across hilly terrain to Unguka Muhinzi on the outskirts of Kigali. Unguka Muhinzi is a private company that serves approximately 6,400 farmers across three coffee washing stations and a dry mill. They process coffee and propagate coffee tree seedlings, distributing one million each year to the farmers they serve. Like many of the Rwandan clients I visited, Unguka Muhinzi has taken part in Root Capital’s Talent Partnership program. They currently have a DBI intern in place who is helping digitize the company’s largely paper-based systems.
As our journey came to an end, I left with a profound appreciation for the impact of Root Capital’s efforts to invest in agricultural enterprises and transform rural communities. It is a great source of pride among Root Capital global staff the fact that we, unlike most commercial lenders, provide right-sized, right-timed loans for our clients. And it was so validating to hear this directly from the Rwandan clients I visited, who noted that Root Capital fills a critical gap in the country’s coffee financing market. They emphasized that because Root Capital really understands the seasonality and contracting complexities of the coffee business, we are able to meet their lending needs and are committed to partnering with them over the long-term.
I also came away with a deep respect for our visionary clients who are driven by a desire to serve and give back to their rural communities. Each of the clients I visited in Rwanda, whether cooperative or private business, operated with an altruistic vision to help local farmers. I am confident that Root Capital’s enduring partnership with these small and growing Rwandan agricultural businesses will continue to drive rural prosperity and promote positive change within the coffee industry for years to come.
Information in this blog post is up-to-date as of publishing time.
To learn more about Scott, use the green arrows above.
As Chief External Affairs Officer, Scott works with external partners to match Root Capital’s mission with their own impact objectives. Together, his team ensures their global colleagues have the resources they need to transform rural communities. This work requires creative thinking and cross-cutting collaboration to engage philanthropists, impact investors, and others that are ready to have an impact. He is grateful that he gets to bring his decades of experience working in resource mobilization for a number of mission-driven organizations focused on economic development, anti-poverty, global health, climate, and humanitarian action to build on Root Capital’s proven impact in rural communities.
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