ABN AMRO partners with Root Capital to support smallholder farmers

Press release -

Coffee farmers

ABN AMRO has entered into a relationship with Root Capital, a US-based agricultural impact investor, to provide impact finance to small agricultural organisations. Last month the first loan participations were closed, serving several coffee cooperatives in Latin America and reaching 4,000 coffee farmers.

Building impact banking portfolio up to EUR 50 million

Impact banking is a combination of offering access to loans while creating a positive impact on humanity (people) and the environment (planet). ABN AMRO aims to build an impact banking loan portfolio up to EUR 50 million in the coming years. Liesbeth Kamphuis and Emilie Ottervanger, responsible for impact banking at ABN AMRO, explain: "Our Impact Banking team was set up in 2015, and lost month we closed our first transaction. We are very happy to partner with Root Capital. By participating in their loan portfolio we will gain knowledge and experience we can use to successfully build up our impact banking portfolio."

Transition to sustainable value chains

ABN AMRO’s Impact Banking Team was set up to assist clients in the agricultural sector in making the transition to sustainable value chains. "We will team up with clients and partners to give farmers in developing countries access to finance. Our main impact goals are to increase productivity and eventually bolster farmers’ livelihoods and to improve sustainable practices throughout the value chain."

Peter Bernard, Chief Operating Officer, of Root Capital: "ABN AMRO is relatively new to sustainable farmer finance, and we are very excited by its entry into this market. The Bank brings a great deal of sector and financial knowledge to this partnership. And with 17 years of experience in social lending, ABN AMRO can build upon our track record. Together through this partnership, we will increase the supply of much needed capital and increase the sustainability of the supply chains that we both support."

Bridging the financing gap

Demand for agricultural products will continue to grow exponentially in the coming decades. A large portion of this demand will need to be met by smallholder farmers, of which there are 500 million globally. These farmers urgently need to invest in their farms to improve productivity. Demand for smallholder finance is estimated to be USD 200 billion, of which USD 50 billion is actually financed in the regions of sub-Saharan Africa, Latin America, and Southern and Southeast Asia.* This financing gap is caused by the fact that smallholder farmers often live below the poverty line and are too small for commercial loans and too big for microfinance. Root Capital and ABN AMRO aim to use this partnership to catalyse access to finance for smallholder farmers.

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