NOTE: A few weeks ago, we announced our Spring 2011 Grants , pledging over $4 million to help fund six organizations that use invention to solve social issues around the globe. Over the next several weeks we’ll feature guest blog posts about each grant. Today, Foundation Program Officer Abby Sarmac talks about the grant and Program Related Investment (PRI) loan to Root Capital to support a fund that helps farmer-owned cooperatives in Latin America, Africa and Asia finance purchases of life-changing technologies.
The Lemelson Foundation is all about invention and technology, from development of life-changing technologies to getting those products in the hands of the people who need them. However, people in developing countries need more than access to technologies that address basic needs like lighting, health care or clean water, they need a way to pay for these technologies and services that often cost more than a family might be able to pay up front.
This is where our partnership with Root Capital begins. Over the last ten years, Root Capital has provided financing to over 300 farmer-owned cooperatives representing over 420,000 farmers in developing countries. The bulk of their lending is relatively short term, low risk trade finance – providing loans to cooperatives ahead of the harvest so that they can pay for inputs and smooth farmer’s incomes. In recent years however, these cooperatives have shown an interest in adopting new technologies that increase incomes and improve their quality of life, like micro-drip irrigation kits, micro-hydro power systems, solar lighting and biogas digesters.
The Lemelson $500,000 PRI loan to Root Capital will capitalize a fund to provide low-interest loans to farmers to purchase these products. In addition, because we understand that with a new program like this there is a certain amount of overhead, we provided a $600,000 grant to support training and research costs that are essential to making the loans work for their farmer clients, including identifying technological needs and developing a the financial vehicle to get the loans to the cooperatives.
We’re excited about this new partnership with Root Capital and what it can do to improve the lives of these farmers. On a personal note, the folks behind Root Capital – founder and CEO, Willy Foote, VP, Brian Milder, and Director of Legal, Lubna Elia, are just amazing, smart, fun people who add so much to the Foundation’s network. They really get the reality of farmers in developing countries, and how they can lift themselves out of poverty. I’m excited to work with Root Capital to learn how our organizations can improve the lives of the poor through technological and financial innovation.