Conexsus Impact Fund

About

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 creates a business platform that can develop a variety of financial products tailored to specific communities and enterprises.

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 government programs. However, small-scale farmers and forest-dwellers are rarely able to access these funds. There are a number of reasons for this, like limited information about credit lines, lack of knowledge from banks, small margins for investors seeking market-based returns, and financial agents’ limited capacity to operate in remote areas. Further, private investments rarely operate in this ecosystem and end up predominantly financing traditional crops.

The Solution
The Conexsus Impact Fund operates within a climate finance platform to boost the number and quality of enterprises accessing a portfolio of instruments such as credit guarantees, convertible debt, credit recovery, private equity, and other types of impact investments. 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.