Conexsus Impact Fund

Overview
Conexsus Impact Fund addresses a significant gap in the way small-scale farmers and forest-dwellers in Brazil access available financing for community-led sustainability efforts. The fund will offer a variety of financial products in conjunction with technical assistance that will enable specific communities to access low rate funding sources from Brazilian rural credit lines targeting economic activities that foster standing forests and avoid deforestation.

The Problem
Boosting deforestation-free agriculture is critical in Brazil, which must balance dual goals to sustain the economy and its vast natural resources. Brazil also has ample rural credit available to support small-scale farmers and forest dwellers in expanding their livelihoods without deforestation, with nearly US $5 billion available through rural credit government programs. However, small-scale farmers and forest-dwellers are rarely able to access these funds, specifically for projects that foster standing forests. There are a number of reasons for this, like limited information about how to access those credit lines, lack of knowledge from banks on these economic activities, and financial agents’ lack of capillarity and limited capacity to operate in remote areas.

The Solution
The Conexsus Impact Fund and Instituto Conexsus operate within a sustainable businesses platform that identifies quality enterprises across the Amazon potentially eligible to access such credit lines due to their size and businesses by offering them a portfolio of instruments such as credit guarantees, convertible debt, credit recovery and other types of instruments that enable them to benefit from extremely low interest rate financing. The platform has three main pillars: business assistance to community-led enterprises and new market opportunities operated by Instituto Conexsus, and appropriate finance mechanisms to ensure viable and scalable businesses, led by Conexsus Impact Fund. It already engages more than 1,000 community-led enterprises, more than 80 private companies, several leading banks and credit cooperatives, and a range of other impact investment instruments. By expanding the size of the Conexsus Impact Fund, it will be possible to accelerate the opportunities within this ecosystem.

Target Impact
The fund seeks to catalyze investment in community enterprises associated with value chains that improve land use, avoiding deforestation and pressure on natural resources. The proponent aims to unlock US$1 billion in rural credit over 10 years, and create US$ 500 million in commercial opportunities for small-scale farmers and forest-dwellers in Brazil.

Featured photo by Kate Evans/CIFOR.