Investing in Rural Business Across the Country
CoBank has a broad mission to support agriculture and rural communities. Financing agribusinesses and rural infrastructure providers is the longstanding, primary pillar of our delivery on this mission, but the bank’s financial commitment extends far beyond the loans, leases and financial services it provides.
Since 2014, CoBank has committed a combined $220 million to 13 independently managed Rural Business Investment Companies (RBICs), investment funds that in turn provide growth capital to rural-based businesses, encouraging further economic development and additional employment opportunities in our country’s often under-resourced rural communities. By 2022, after just eight years, RBICs had raised more than $1 billion, with CoBank and 22 partner Farm Credit organizations providing more than 70% of that capital.
“Rural America is home to a plethora of businesses and entrepreneurs facing uncertain access to capital, making it difficult for them to grow their operations and achieve their business goals,” said David Dornbirer, vice president of mission investments for CoBank. “Through the investment funds CoBank and Farm Credit help finance, these rural enterprises have greater opportunity to thrive and ultimately deliver economic benefits to their communities, including the farmers and ranchers who live there.”
RBICs are licensed by the USDA as part of its Rural Business Investment Program, designed to promote economic development and job creation in rural areas. Each RBIC has an individualized investment thesis, strategy and focus. For example, the Innova Ag Innovation Fund targets technology-enabled products and services that provide solutions for farmers and ranchers. Specific businesses that have received funding from CoBank’s portfolio of RBICs include ag processing, genome mapping, animal nutrition, and animal and alternative protein companies, as well as rural healthcare companies that aim to lower the cost for and/or improve access to care. In all, more than 100 businesses have received an influx of capital to fund their growth, as depicted below.
“We view our community investment strategy as an integral and complementary path to supporting America’s rural economies, which is a key part of our mission,” said Andrew Jacob, CoBank’s COO and longstanding RBIC program advocate. “Our goal is to enrich and broaden CoBank’s mission service to rural America, generate additional value for our customer-owners and support appropriate risk-adjusted earnings over the life of each fund. We are focused on supporting an increase in rural prosperity through access to capital and continuing partnerships through our cooperative business model with Farm Credit and other likeminded investors.”