Closing the smallholder regenerative agriculture finance gap requires more than new capital. It takes practical, investable pathways that match local realities.
That was the starting point for the fourth webinar in the AMEA Environmental Working Group dialogue series, held on 13 August 2026 in collaboration with the Cash Coalition. The question on the table was a direct one: how do we get climate capital and technical support to the Agri-SMEs and cooperatives that connect smallholder farmers to markets?
Speakers from Root Capital, One Acre Ventures and the Cash Coalition shared how they combine financial capital with technical assistance to strengthen the missing middle between farmers and finance, and to improve climate resilience for farmers.
Root Capital: pairing climate finance with advisory services
Elizabeth Teague, who leads Root Capital's Climate Resilience Initiative, opened by setting out the scale of the gap. Agri-SMEs are often the only actors providing farmers with market access, training, inputs and financing year after year, yet less than 1% of global climate finance reaches smallholder communities.
Root Capital's response has been to design climate finance products that build resilience across three dimensions: soil, crop and business. The offer combines small grants of between $10,000 and $20,000 to fund early stage pilots and generate proof of concept, followed by climate loans from $20,000 up to $1 million to scale what works. Over the last decade the organisation reports more than $16 million in climate finance to over 70 Agri-SMEs across Africa, Asia and Latin America, reaching over 6,000 farmers and 16,000 hectares.
Early results are encouraging. Agri-SMEs receiving climate finance show a 23% increase in resilience compared with those that do not, and farmers affiliated with those businesses show a 7% increase in their own resilience after a single year of financing, even where the finance does not reach farmers directly.
Critically, Elizabeth positioned business development services as the enabler rather than the extra. Root Capital's advisory team is involved from beginning to end of every climate deal, helping businesses identify priority climate interventions, co-creating viable investment plans, and supporting due diligence and monitoring.
Uganda in action: from diagnostic to climate action plan
Rose Ochieng, Director for Advisory in Africa at Root Capital, walked through how that works in practice. Technical assistance is delivered across four service areas: business management advisory, agronomy and climate resilience advisory, digital business intelligence, and gender as a cross cutting service.
The entry point is a diagnostic. An agronomic diagnostic doubles as a climate risk assessment, identifying the risks a business faces and the capacity gaps behind them. Client and advisor then co-create a climate action plan, a living document revisited as risks shift and gaps close, with a fresh diagnostic every two years. Businesses are then brought together in climate vulnerability workshops, where five to ten agribusinesses in the same value chain spend three days exchanging experience and mapping seasonal interventions before returning to prioritise their own plans.
Two Ugandan cooperatives illustrate what follows. One cooperative used a $20,000 grant to purchase solar irrigation kits, distributed to farmers through the cooperative's existing SACCO. Routing the grant through the SACCO created a revolving fund, so repayments recapitalise the fund and finance the next round of farmers. Twenty one kits were distributed. The team also learned something important: the kits suited farms of five acres and above, and maintenance costs were high.
The same cooperative later took a $185,000 climate loan on a five year term at 4% interest, alongside, and without affecting, its existing working capital facility. Around $20,600 funded a coffee solar dryer, allowing the cooperative to dry coffee to the right moisture content even as harvest season rainfall becomes less predictable. The balance expanded a tree nursery supplying resilient coffee varieties to member farmers.
The lesson from the five acre threshold shaped the next intervention. Working with KickStart, Root Capital identified treadle pumps suitable for farms of two acres and below. At a second cooperative, fifteen farmers took up the kits, 35% of them women, again through the SACCO structure. Beyond irrigating coffee, the pumps opened up additional income generating activities including vegetable production and individual tree nurseries.
As Elizabeth put it during the discussion, there is no silver bullet. Capital has to be deployed for multiple purposes and through multiple channels, including farmer level structures such as SACCOs.
One Acre Ventures: capital, technical assistance and the ladder
Alvin Otim presented One Acre Ventures, the investment arm of One Acre Fund, which works with smallholder households across ten African markets. The fund's origin story is a diagnosis of the missing middle. One Acre Fund had spent years raising farmer productivity through quality inputs and advisory, only to see gains eroded when the Agri-SMEs buying that produce were too undercapitalised to pay a fair price on time.
One Acre Ventures invests in businesses that have operated for at least three years, are legally registered, and turn over roughly $250,000 to $300,000 annually. Capital addresses working capital gaps and capital expenditure for processing and storage. What distinguishes the model is that technical assistance is not an add on: roughly 10% to 15% of each investment is set aside as additional capital for strengthening operations, accounting systems, hiring, certification and farmer recruitment.
Pipeline comes from the One Acre Fund network itself. Field teams ask farmers directly which businesses buy from them and at what price, using farmer trust as a due diligence signal. The fund has also moved away from trade finance toward mezzanine debt with tenors of one to five years, matching risk and return for businesses building processes and opening markets for the first time.
The goal is a ladder. One Acre Ventures aims to be the first institutional investor in businesses working with 500 to 3,000 farmers, put governance systems and climate adaptation support in place, then hand those businesses on to larger funders in around five years.
Case study: a chili exporter in Rwanda
A chili exporting company working with over 5,000 farmers had secured buyers in Europe, the UK and Asia, but could not meet the quality standards those markets demanded. Diagnosis traced the problem to the seedling stage, where climate variability meant slower growth and roughly 60% of seedlings failing to germinate. Farmers were losing crop and losing confidence in chili as a value chain.
The co-created solution was a greenhouse nursery, handed over to a local youth group to run as a business selling quality seedlings to outgrowers. Germination rates improved, the company protected its export contracts, and a new enterprise entered the community. Climate thinking also runs upstream in the fund's investment criteria, which favour tree crops and value chains suited to intercropping and stable export demand.
The missing middle needs a support team
Tracy Bain, Executive Director of the Climate Action for Smallholders Coalition, closed the session by drawing the threads together.
Her central observation was that Agri-SMEs are not only the conduit for larger financial resources into smallholder communities, they also need technical assistance and financial support themselves in order to grow, professionalise and improve their bankability. Organisations like Root Capital and One Acre Ventures, she suggested, function as an extension of the missing middle, or the missing middle support team: they access large investment pools, then translate that capital into the right sized, flexible and affordable instruments that Agri-SMEs can actually absorb, paired with targeted technical assistance such as climate action plans and growth strategies.
Seen through an ecosystem lens, strengthened Agri-SMEs become engines of community growth, filling the gap between smallholder producers and the regional and global technical and financial opportunities that allow farming communities to scale and thrive.
Support needs to match the stage
A theme running through all three presentations was segmentation. Different businesses need different support at different points:
- Early stage: seed capital, business model validation, foundational technical assistance
- Growth stage: working capital loans, scaling support, supply chain strengthening
- Mature stage: climate finance, equipment financing, market expansion support
Alvin framed the same idea as a ladder of capital across the ecosystem, with farmer organisations and cooperatives forming the base on which everything else is built. Where one investor's mandate ends, another's should begin, and that handover is where collaboration becomes practical rather than theoretical.
Five takeaways
- Missing middle. Agri-SMEs bridge smallholder farmers and larger markets, making them critical partners for climate resilience.
- Blended support. Successful Agri-SME support needs both financial capital and technical assistance, tailored by stage.
- Ecosystem approach. Climate resilience requires coordinated action across investors, Agri-SMEs, cooperatives and support organisations.
- Collaboration potential. Real opportunities exist to coordinate approaches, avoid duplication and maximise collective impact.
- Targeted BDS. Well designed business development services improve climate resilience for farmers and growth prospects for Agri-SMEs at the same time.
Join the conversation
This webinar was hosted by AMEA's Environmental Working Group, a space for members to shape how the network tackles climate resilience, regenerative agriculture and environmental standards across the BDS ecosystem. The group is developing a position paper to organise sectoral learning and share it with the wider development and impact investment community.
Want to help shape the next dialogue? Join the Environmental Working Group, suggest topics or speakers for the next session, and share this recap with your network.
AMEA thanks Elizabeth Teague and Rose Ochieng (Root Capital), Alvin Otim (One Acre Ventures) and Tracy Bain (Cash Coalition) for their contributions, and Casey Harrison for moderating.