Root Capital coming to next Sloan finnovation class
By David Auerbach
Smart capital makes a difference in the developing world. While we must work to open up capital markets and provide greater access to capital to the missing middle, there’s still a pressing need to develop the right capital structures for entrepreneurs running small and growing businesses. Debt…equity…quasi equity, it’s a confusing and complicated choice for everyone, especially those who have never had exposure to such choices before.
Root Capital has not only provided $155 million in credit to agriculture-based entrepreneurs in 30 countries, but it has also ensured every step of the way to structure smart deals that empower rather than entrap the entrepreneur. For example, one common loan they offer is short-term, low-interest working capital loans in the pre-harvest season. Root Capital has a repayment rate of over 99%, a rate any commercial bank would salivate for.
Given the success of Root Capital’s model, why aren’t local banks following suit? What are the challenges that prevent Root’s model from scaling globally?
Brian Milder, Director of Strategy and Innovation at Root Capital, will join the Finnovation’s final seminar to lead a discussion on these issues.
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