Last December, Catholic Relief Services, announced the investment of USD 500,000 into sustainable vanilla bean supplier Lafaza, in what amounts to the first instance of “impact investment” made by CRS. The funds, which Lafaza is getting as a loan, “not a donation”, will be joined by another 250,00 from the MGR Foundation. Social investment fund Root Capital will keep track of the investment, and the social and environmental returns to come with the financial returns.
Interest on impact investment has grown in the past year. As the risks and returns of this funding instrument become clearer, funds available grow along with investors time frames, which for seasonal agricultural products could be a game changer. Lafaza’s commitment to small farmers, sustainable farming and protection to dense agroforestry systems makes long-term funding all the more important to tackle this number of complexities.
About the loan, CRS President and CEO Carolyn Woo declared,
«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.»
Lafaza’s CEO, Nathaniel Delafield, trusts the ongoing relationship with CSR involves knowledge transfer, especially related to capacity building.