This Group Aims to Level the Playing Field for Men and Women Business Owners Around the World Root Capital evaluates business on 8 metrics to ensure gender equality, and the results help businesses and communities at large.
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Odalis Noeme Guerrero is something of an unexpected success in Peru. The 26-year-old is half of the two-member technical team at a 400-member coffee co-op, and the only female agronomist in the province of San Ignacio. She accomplished this with lots of hard work and luck, and is sharing her expertise thanks to Root Capital, a lender to farmer associations and agricultural businesses in Africa and Latin America.
Guerrero earned a technical degree in sewing, but wanted to instead join the family coffee business. By custom, she was to inherit no land. Guerrero convinced her father to give her a small plot of unproductive land. She boosted the yield from 200 pounds to 1,800 pounds.
At the same time, she earned an agricultural degree and now trains the women in her co-op in technical issues, as well as empowerment and leadership. Her father and her brothers have come to seek out her advice as well -- and have doubled their own yields.
Guerrero is also a "hidden influencer" in one of Root Capital's programs. The non-profit organization seeks borrowers that will both repay their loans and strengthen their communities. They also seek to give women business opportunities that otherwise might not exist.
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For example, the Nahuala coffee cooperative in the highlands of Guatemala is the kind of growing rural agricultural business Root seeks out. Nahuala buys beans from 70 female who own small farms, along with about 90 male farmers. Since 2008, Root Capital has disbursed $936,000 to Nahuala in short-term trade credit and longer-term working capital.
Most of the Nahuala-sourced coffee is certified organic and fair trade, fetching higher and more stable prices than standard beans. The co-op gains an additional premium of two cents per pounds by exporting through the exporter Cafée Femenino, which sources coffee exclusively from women farmers. In 2013, Nahuala exported 20,000 pounds through Cafée Feminino.
The partnership has helped recruit more women to Nahuala. Rather than letting men collect the payments as usual, the co-op pays women directly. The co-op trains women in operations; many have moved into production activities traditionally restricted to men, such as pruning and fertilizing that are traditionally restricted to men. Women remain less likely than men to participate in co-op assemblies, however -- an example of the kind of cultural challenges women continue to face.
"As coffee producers, we have been able to access credit through the cooperative," Maria Susana Guarchaj Tahay, a member of Nahuala's women-only group that produces coffee for Café Femenino brand, told Root Capital. "Coffee is what keeps us fed and gives sustenance to the family."
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Root is applying its experience at Nahuala and other "gender inclusive" businesses across its $100 million loan portfolio. In 2014, Root reached 182,838 women farmer-suppliers in 279 businesses -- up from 114,000 in 2013, putting Root ahead of schedule toward its 2016 goal to reach 200,000 women producers.
"Everyone wants the business case for gender equity. For us, it's driven by our commitment to create opportunity for women at all levels," says Catherine Gill, Root's senior vice president for investor relations. "We plan to build a body of argument and literature using the gender lens."
Root's report, "Applying a Gender Lens to Agriculture," is part of a growing body of evidence that economically empowering women triggers gains in public health, early childhood development, human rights and economic competitiveness. Root is collecting additional data to determine whether women's leadership definitively boosts the bottom line of its customers. The next step is to collect data on the women-effect in the production of quinoa in South America, cashews in West Africa and coffee in East Africa.
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Root's Women in Agriculture initiative, launched in 2012, has given the organization a better understanding of the different ways gender inclusiveness boosts business performance. The goal is to locate not only the portfolio sectors with high rates of female participation and leadership, but those with low rates as well, to more accurately target services Root Capital or its partners can offer to support gender equity and create a pipeline of high-impact businesses ripe for support.
Root already has moved to apply a "gender lens" to all of its lending activity. Root's gender scorecard uses eight metrics to determine a borrower's gender inclusiveness, including the number women farmers, women leaders and women borrowers from the organization's internal loan funds. The analysis has given the nonprofit organization a deeper understanding of how its investments affect men and women differently, the cultural barriers still holding women back and the opportunities to improve the livelihoods of women and their households.
For example, cooperatives appear to help level the playing field between men and women members and their households if training and credit is provided equally to both genders. Female participation rates and leadership roles vary, though social and cultural traditions and limited land access may hold women back more than discriminatory membership policies. Root Capital is seeking ways to increase their participation. That means training female accountants and managers in advisory financial management and targeting investments to programs demonstrating gender equity. Expanding loan offerings to include more income diversification may offer disproportionate benefits to women.
One surprise from the research: the importance of women in the middle tiers of agricultural businesses. Root now tracks the access for women to positions as mid-level managers, internal inspectors, field officers, "agrodealers," agronomists and the heads of farmer networks. These "hidden influencers," as Root calls them, may better help women farmers access inputs, agronomic advice and market information, suggesting that "promoting opportunities for women to obtain agronomic education and enter the workforce in these roles would have disproportionate benefit for rural communities."
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Impacts
Financial
Since 1999, Root has disbursed $791 million in capital to 546 borrowers. Its current outstanding loan balance is $103 million.
Social
According to the organization's impact dashboard, Root's lending activities have resulted in $920 million in payments to producers, directly improving the livelihood of 815,000 producers and indirectly another 193,000.
Produced by ImpactAlpha and the Case Foundation.
One of a series of impact profiles produced in conjunction with the Case Foundation's new publication, "A Short Guide to Impact Investing."
