A Revolving Loan Fund (RLF) is the source of money from which loans are made for several small business development projects. Revolving loan funds share many characteristics with microcredit, micro-enterprises, and village banking, ie providing loans to persons or groups of people who are not eligible for traditional financial services or are otherwise considered to be at high risk. Borrowers tend to be small producers of goods and services - usually crafters, farmers, and women who have no credit history or access to other types of loans from financial institutions. Organizations that offer revolving loan funds aim to help new projects or business owners become financially independent and eventually become eligible for loans from commercial banks.
The Fund gets its name from the revolving aspect of the loan repayment, where the central fund is replenished as an individual project to repay their loans, creating opportunities to issue other loans for new projects.
Video Revolving Loan Fund
Popularity in Academics
Green Scrolling Fund (GRF)
Revolving loan funds are often referred to as green revolving funds, or GRF , when they start on campus and campus. These types of funds target projects that improve campus energy efficiency, reduce resource use, and implement other projects and programs falling under the sustainability category. In recent years, GRF has become increasingly popular on college campuses in the United States. The funds are managed and managed by the university, with loans granted to university departments or campus groups.
In February 2013, the Association for the Advancement of Sustainability in Higher Education (AASHE) released a database of sustainable campus revolving loan funds. As of March 2013, there are 84 revolving loan funds in 80 institutions in North America containing $ 118,737,518 [1].
Example of a Green Scrolling Fund
- Harvard University (MA) - The Green Loan Fund was created in 2001 and has $ 12,000,000.
- Western Michigan University (MI) - Quasi GRF WMU was created in 1980 and has $ 365,000.
- Oberlin College (OH) - The student-managed Green EDGE Fund was created in 2007 and has $ 344,000.
- Lane Community College (OR) - The Lane Energy Management Fund started in 2006 and has $ 122,000 available. Oregon State University (OR) - Oregon State University The Sustainable Energy Revolving Loan Fund started in 2010 and has $ 300.3000.
Carleton College (MN) - The Sustainability Revolving Fund (SRF) began in 2007 and has $ 71,101.
Decorating the Bottom: A Trend to a Green Scrolling Fund on Campus
In February 2011, the Institute of Endowments endowed the paper "Greening Underlining: Trends to a Green Scroll Fund on Campus." The paper examines 52 active rolling green funds in the US, with findings based on a series of interviews and surveys with directors and sustainability administrators involved in the development of green revolving funds and operations at the college and university levels.
Greening the Bottom Line reports the formation, operation, and financial performance of green revolving funds. The report is written with the explicit purpose of providing basic data to track the sustainability of the emergence of green revolving funds in higher education to act and act as a resource for agencies interested in building their own.
Greening the Fund found that for institutions with green revolving funds:
- the number of institutions with green revolving funds is growing. Of the 52 who reported active green revolving funds, 37 funds were created between 2008 and 2011.
- institutions do not have to be rich to create green revolving funds: more than 32 percent of the funds reported in Greening the Bottom Line are $ 100,000 or less.
- There are various educational and university sizes, ranging from $ 7.6 million (Lane Community College) to $ 25 billion (Harvard University).
- There are a variety of student and student populations, from 1,381 students (Kalamazoo College) to 42,000 students (University of Illinois Urbana-Champaign).
- schools report a range on the return of their GRF project portfolio of investment from 29 percent (Iowa State University) to 63 percent (University of Denver).
Sample GRF Supported Projects
Green rolling funds can invest in various projects and have supported projects that impact on a university's carbon footprint or the local environment. Examples of these projects include: installing technologies that save water and electricity; improve campus recycling rates; institutionalize campus composting program; increase the transfer of campus waste from landfills; replacing fuel sources (eg converting campus plants to burn biomass or biodiesel, not traditional fuel sources); and introducing behavior change programs that increase students' awareness about the use of individual resources.
Fund Type Scrolling Green
There are three types of green revolving funds that target different institutional priorities 1. Efficiency fund provides capital for energy and/or water efficiency measures. Their goal is to reduce resources and save money. Project ideas are initiated and managed by staff from the Facility, Energy Management and/or Ministry of Finance. Efficiency funds tend to require relatively short payback times and are not usually used to engage the wider campus community 2. Innovation and engagement funds explicitly seek community involvement in project proposals. Projects funded may have short refunds, long returns, or no refund requirements. Innovation funds often provide loans that require payments for projects that will result in operational savings, and they use these returns to subsidize grants for projects that will not result in cost savings. Innovation funds are generally managed by the committee and often include significant student participation and/or supervision 3. Hybrid funds resource reduction targets and cost savings, but also consider community engagement and outreach objectives. Most of the funds follow this model. They finance efficiency projects in addition to broader initiatives such as renewable energy development, solid waste diversion, and reduced use of materials such as paper or synthetic grass chemicals. Hybrid funds often seek to involve and/or educate the campus community in sustainability efforts. A large group of campus stakeholders tends to provide supervision of hybrid funds while they are managed by facilities or staff of sustainability.
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Green rolling funds can impact many aspects of the day-to-day operations of an institution. They can be used to:
- Provides initial capital for energy and/or water efficiency measures.
- Reduce school operating budget by reducing campus electricity and water consumption.
- Reduce school carbon footprint and greenhouse gas emissions.
- Record basic data to compare resource use over time and/or to improve energy and water usage tracking.
- Update aging infrastructure by installing newer energy-efficient technologies.
- Improving campus building comfort, function, and efficiency as well as reducing the need for building maintenance.
- Develop renewable energy technologies that can be used for further campus research and offer opportunities for interdisciplinary education and research on sustainability, which can provide additional resources to complement the curriculum.
- Ensure that schools will have ready capital resources that are explicitly designated for projects that have a real impact on sustainability, operate without threatening seed money or cost savings reabsorbed into the utility or budget of the central administration.
- Foster collaboration between the financial office, sustainability, facilities, faculty, and students.
- Increase savings due to high reported return on investment and high levels of involvement by the campus community.
Financial Data on Green Scrolling Fund
Return of Investment
Green rolling funds at college and university levels report high return on investment. The highest reported ROI is at the University of Denver with 63 percent ROI for their Energy Reserves Fund project portfolio. The minimum reported ROI comes from the Direct Green Spreading Loan Fund at Iowa State University with an ROI of 29 percent.
Payback Periods
Schools with green revolving funds report an average project return period ranging from 1 year to 10 years, with a median of 4 years.
Seed Seed Sourcing
Colleges and universities seek initial funding from various sources, including:
- allocation from the central budget or other administrative resources
- student cost installations and government student grants
- previous efficiency and utility cost savings
- Outside donations or funding of other foundations
- investment from endowment, or
- a combination of two or more sources above.
Maps Revolving Loan Fund
References
Resources
Dieboldt, A., Den Herder-Thomas, T., "Creating a Campus Sustainable Sustainability Fund Campus", Association for the Advancement of Sustainability in Higher Education; April 2007.
Weisbord, D., Dautremont-Smith, J., Orlowski, M. "Greening the Bottom Line: Trends to a Green Rolling Fund on Campus", Institute of Endowments Continuity; February 2011.
Flynn, E., Orlowski, M., Weisbord, D. "Greening Underworld of 2012", Institution of Endowments Sustainable; October 2012.
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