Guide to community revolving loan funds

The transfer of resources to countries and communities most in need is a major objective of United Nations development assistance programmes. Among the types of assistance, community revolving loan funds have as yet been few, although they do constitute a useful as well as renewable means of increasing incomes in particular, for groups whose low incomes and lack of collateral prohibit their use of banking systems, and who often are forced to pay very high interest to individual money-lenders.
The Voluntary Fund for the United Nations Decade for Women, which became operational as a United Nations Trust Fund in 1978, has received a number of requests from developing countries for pro vision of community revolving loan funds. When projects proposed appear to be viable income-generating ones, these requests have been granted. However, there has no guide book on how to use such funds, and communities often requested assistance setting them up. To meet this need, a survey was undertaken of some 300 organizations around the world which had experience with loan funds, to define the steps to be taken in establishing one, to understand the problems which might arise in managing one, and to point important areas for discussion within a community.