Revolving loan fund

A Revolving Loan Fund (RLF) is a source of money from which loans are made for multiple small business development projects. Revolving loan funds share many characteristics with microcredit, micro-enterprise, and village banking, namely providing loans to persons or groups of people that do not qualify for traditional financial services or are otherwise viewed as being high risk. Borrowers tend to be small producers of goods and services — typically artisans, farmers, and women who have no credit history or access to other types of loans from financial institutions. Organizations that offer revolving loan fund lending aim to help new project or business owners become financially independent and eventually to become eligible for loans from commercial banks.

The fund gets its name from the revolving aspect of loan repayment, where the central fund is replenished as individual projects pay back their loans, creating the opportunity to issue other loans to new projects.

The revolving loan fund is often referred to as a green revolving fund, or GRF, when it is initiated on college and university campuses. These types of funds target projects that improve campus energy-efficiency, reduce resource use, and implement other projects and programs that fall under the category of sustainability. In recent years, GRFs have become increasingly popular on campuses in the United States. The funds operate and are managed by the university, with loans issued to university departments or campus groups.

In February 2013, the Association for the Advancement of Sustainability in Higher Education (AASHE) released a database of campus sustainability revolving loan funds. As of March 2013, there were 84 revolving loan funds at 80 institutions in North America containing $118,737,518 [1].

In February 2011 the Sustainable Endowments Institute published the paper "Greening the Bottom Line: the Trend toward Green Revolving Funds on Campus." The paper researched the 52 active green revolving funds in the US, with findings based on a series of interviews and surveys with sustainability directors and administrators involved in green revolving fund development and operation at the college and university level.

Greening the Bottom Line reports on a green revolving fund's formation, operation, and financial performance. The report was written with the explicit purpose to provide a baseline for tracking the continuing emergence of green revolving funds in higher education to act and to act as a resource for institutions interested in establishing their own.

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