Our sustainable credit facility exists to support the development of our services in Sustainable Enterprises and Sustainable Lifestyles & Communities. The aim of the facility is to provide upfront finance that enables investment in capital equipment that will in the long term lead to sustainability. As the payback or effects of the investment are not always realised immediately the planning process prior to the disbursement of finance is vitally important. The main aim in this period is to match the repayment schedules for the finance with the savings that come from the investment. This involves working closely with the target community to identify and quantify expected benefits and place these within a realistic timeframe for the repayment of the loan.
The facility borrows from the concept of traditional microfinance and expands upon it to redefine the the development role essentially into a tripple bottom line (economic-social - environmental) or sustainable development goal. Specifically the facility is operated at a local level by the community that includes the customers of the loans that are provided. This decision making structure reduces the operating costs and addresses the lack of ownership that customers can feel with traditional microfinance.
Monitoring and development of the fund is no less important than within traditional models of microfinance. In this the local community are required to develop their reporting and management structures for day to day supervision and monthly community meeting and auditing of accounts are undertaken to ensure compliance and repayment.
A typical sustainable credit fund in a community will ensure the following minimum criteria;
- Governance structure within the community organization to manage the credit and also act in dispute resolution
- Tripple Bottom Line criteria to approve a loan, ensuring sustainable development in the community
- Setting-up a community fund with the interest provided to ensure that growth is retained within the village and dependency on external borrowings are faced-out
- Assurance of welfare/welbieng loan for any individual case of poverty trap to ensure no poverty situation arises again