How Willy Foote Took the Road Less Traveled and Became a Catalyst for Change
In the late 1990s when Willy Foote was touring the back roads of Mexico as part of a business journalism fellowship, he came across a vanilla cooperative that was the main source of income for dozens of local farming families. But the cooperative was stuck in the middle. As much as its leadership longed to grow and reach more farmers, they were too big to apply for microfinance loans and too small and remote to be backed by commercial banks. Without access to financing and capacity building, the enterprise couldn’t expand — and the community remained mired in poverty.
“I was really troubled by how many farmer cooperatives were failing due to lack of access to markets, capital and possessing basic business skills,” says Foote. “I started thinking of ways that I could change that outcome and the result was Root Capital.”
Since 1999, Foote’s “aha! moment” has built sustainable incomes for millions of farmers, expanded distribution channels and facilitated growth opportunities in communities across Latin America, Africa and Southeast Asia. Root Capital has lent more than USD1.4 billion to 700+ enterprises, reached 1.5 million farm families (nearly 7 million total people) and provided financial, agronomic and other training to 1,500 enterprises.
“We’ve accomplished so much, yet it still feels like we’re just getting started,” says Foote. “We believe that the only way to unlock a sustainable future for all of us, is to include those traditionally left behind. By focusing, responsibly, on this critically underserved community of agricultural enterprises, we can unlock global change for millions of farming families around the world.”
Pay for impact
Financing remote, early-stage enterprises can be costly, not to mention risky. In 2019, Root Capital launched a “pay for impact” partnership in collaboration with the impact advisory firm Roots of Impact, IDB Lab (the innovation laboratory of the Inter-American Development Bank) and SDC (Swiss Agency for Development and Cooperation). The three organizations had previously found success together using their SIINC (social impact incentives) model to support health care and energy projects in Latin America. SIINC is a funding instrument that rewards organizations when they have achieved verified social impact. In Root Capital’s case, SIINC incentivizes investment in early-stage enterprises with high impact potential — those that the market would otherwise continue to overlook.
Since last year, the partnership’s results have been resoundingly positive, increasing Root Capital’s high-impact lending in target countries, providing loans to smaller, earlier-stage businesses and expanding their client pipeline. Foote cites the exponential effects this can have by highlighting a story about a coffee enterprise in Colombia called Invercafe.
“Invercafe operates in regions that were hit particularly hard by the decades-long armed conflict in the country, which meant no one was willing to provide them with a loan,” says Foote. “Under the SIINC model, they were offered a USD300,000 line of credit, which they are using to pay farmers a better wage and to pay them on time, which is empowering more resilient livelihoods for their producers and employees — half of which are women.”
The importance of which cannot be overemphasized.
Women, according to The World Bank, make up a large part of agricultural labor across the globe. In some developing countries, their contributions exceed 50%. Closing the gender gap has the potential to increase yields on women-run farms by 20-30%, which could raise total agricultural output in developing countries by 2.5-4%.
“The big problem in agriculture is that women have much lower access to assets and productive resources than men,” says Foote. “If women were given the same opportunities, they could increase their yields, which would boost total food production and reduce the number of hungry people by 100 to 150 million.”
Helping turn this possibility into a reality was the inspiration for Root Capital’s Women in Agriculture Initiative. The program finances gender-inclusive agricultural businesses that actively create jobs and opportunities for women. It also trains women leaders, managers, support staff and farmers in key financial and agricultural skills. Since 2014, Root Capital has more than doubled the number of women farmers reached via lending — from 117,000 in 2014 to 246,000 in 2018.
“The more I understand the many facets of the challenge of rural poverty, the more I’ve come to appreciate the power of systems entrepreneurship versus social entrepreneurship,” says Foote. “Your impact through direct product and service delivery pales in comparison to how your influence extends beyond your factory gates to inspire others to take action for big change. Systems change, which might sound like philanthropic jargon, is actually pretty simple: It’s looking deeply at a problem or issue, unearthing the root causes and focusing on long-term solutions, not just quickly treating the symptoms.”
An unexpected result of focusing on system changes “beyond the factory gates” was a realization they needed to be focused inside as well. The impactful work Root Capital was doing externally in regard to gender parity ended up shining a spotlight on the need for greater gender inclusion within the organization.
Says Foote, “I grew up in a family with strong women role models and have always believed in equal rights for men and women, but my privilege blocked me from seeing the gendered implications of our own work.”
Following a participatory process across the organization, Root Capital revised their approach to compensation, improved the gender balance in their leadership team and developed a new set of leadership principles that prioritized equity in all its forms.
“These changes won’t fix everything overnight,” says Foote, “but we must practice radical collaboration in order to find purposeful synergies for deep and lasting impact.”
Driving bold change
Foote was raised with the understanding that being born into fortunate circumstances meant it was his duty to solve not small problems, but big ones. This concept has led him to probe deeper and deeper, constantly seeking new ways to combat “grinding rural poverty” and put an end to widespread hunger, violence and environmental destruction.
For example, over the past two decades, Foote has seen firsthand how vulnerable farmers are to the effects of climate change. Root Capital now provides agricultural enterprises with the tools to understand climate risks and helps farmers adapt without sacrificing their livelihoods.
“When my father died four years ago, my cousin described him as having had a life ‘crowded with usefulness,’” says Foote. “I’ve tried to mirror that in my own leadership experience. It’s still a work in progress, but there’s something very powerful in enabling collaboration by connecting deeply with partners across the public, private and nonprofit sectors. I believe we can drive bold change in the world — together.”