Media CenterCatholic Relief Services Announces First-Ever Impact Investment Loan in Madagascar
FOR IMMEDIATE RELEASE
Catholic Relief Services
Investment Emphasizes Sustainability; Boosts Farmer Incomes
BALTIMORE, MD, DEC. 19, 2016 --- Catholic Relief Services (CRS) has made its first impact investment, a $500,000 loan to Lafaza, a mission-based agricultural business in Madagascar that buys premium vanilla from small-holder farming communities at fair trade prices and then sells it for retail, wholesale and through export channels. Emphasizing sustainable impact in all of its work around the world, CRS identified Lafaza as an ideal candidate as the company also works with local producers to improve and grow their capacity.
The MGR foundation, a long-time CRS supporter, is providing an additional $250,000 loan to Lafaza. These loans will be managed by Root Capital, which extended an initial working-capital loan to Lafaza earlier in 2016 for the current vanilla harvest season in Madagascar.
“This is exactly the type of investment that shows the power and possibility of Impact Investing,” said Carolyn Woo, President and CEO of CRS which helped organize and co-hosted conferences on Impact Investing and the Catholic Church at the Vatican in 2014 and earlier this year. CRS has committed five percent of its reserves to invest in established impact funds, along with committing additional resources to making investments in enterprises that link to CRS programs.
“This is not a donation,” Woo said of the loan to Lafaza. “We expect a financial return, money that we will re-invest to benefit the poor around the world. But we also know that by supporting the work of Lafaza this loan will create sustainable livelihoods for small-holder farmers in Madagascar.”
Root Capital is a non-profit impact investor focused on supporting smallholder farmers in Latin America and Africa. Its loan to Lafaza was backed by the U.S. Agency for International Development (USAID) through its Development Credit Authority (DCA), which provides partial loan guarantees.
“We are so pleased to continue our partnership with CRS and the Catholic Church,” said Willy Foote, founder and CEO of Root Capital. “We know from our experience that reliable access to capital and training makes a transformative difference for entrepreneurs and the thousands of smallholder farmers they serve.”
Lafaza was founded by President James Delafield in California, and CEO Nathaniel Delafield and his wife Sarah Osterhoudt while they were Peace Corps volunteers in Madagascar from 2005-2007 after local growers’ associations asked for help finding new international markets for gourmet vanilla beans. Inspired by the resulting collaboration, they established Lafaza in 2005 to work across the entire commodity chain.
CRS’ investment in Lafaza will promote sustainable livelihoods for vanilla farmers in the Mananra North region of Madagascar where CRS has worked. Lafaza sources vanilla primarily from a cooperative of about 20 associations of vanilla farmers in the Mananara North, which the company helped establish in 2010 in partnership with many local producers.
Lafaza helps these local farmer organizations in various ways such as providing training on business skills and environmental conservation strategies. The loan will help position the company for future growth, including an expansion of its work in southeast Madagascar where CRS is currently implementing a food security project funded by USAID’s Office of Food for Peace (FFP). Lafaza hopes to begin sourcing vanilla from farmers in this region in the future, building on current training and capacity building efforts.
Dina Esposito, the Director of FFP, said, “This kind of public-private partnership is increasingly the direction we want to see our partners head in, so we are very excited by the prospect of this new and creative partnership. Kudos to CRS for making it happen.”
“CRS has taken some bold steps to become an active participant in the impact investing landscape,” adds Woo. “We see a number of trends that continue to inform our forward momentum on impact investing, including an increased interest from our traditional donors to catalyze the sector. As we move into 2017, we are looking forward to new partnership opportunities to create such innovative financing solutions.”
Nathaniel Delafield, CEO of Lafaza, said: “Lafaza is thrilled to be working with the CRS Impact Investment Program after collaborating together in Madagascar over the past three years. CRS is a world leader in integrating smallholder farmers into international supply chains using sustainable, ethical approaches. We are proud to be innovating new models of trade in Africa, and to be able to provide a return on investment for CRS that can recirculate to other impact businesses over time.”
Catholic Relief Services is the official international humanitarian agency of the Catholic community in the United States. The agency alleviates suffering and provides assistance to people in need in more than 100 countries, without regard to race, religion or nationality. CRS’ relief and development work is accomplished through programs of emergency response, HIV, health, agriculture, education, microfinance and peacebuilding. For more information, please visit crs.org or crsespanol.org and follow CRS on social media: Facebook, @CatholicRelief, @CRSnews, YouTube, Instagram and Pinterest.