Frequently Asked Questions

1. What is the Community Revolving Fund/Community Development Fund(CRF/CDF)?

The Community Revolving Fund (CRF) a community group, saving together in a common fund which is deposited in a reputable financial institution.
The Community Development Fund is a capital or loan fund formed by the CRF and is registered as a Provident Society under the Industrial and Provident Societies Act. It operates in conjunction with the CRF and upon meeting MIDA's financial standard and criteria, seeks to be accredited as an Approved Lending Agency

2 . Who makes up these entities?

The CRF is made up of members of the community.
The CDF is made up of members of the CRF as shareholders and a management committee consisting of members of the executive of the CRF, at least four (4) persons from the private sector. The Chairman of the CRF cannot be the Chairman of the CDF.
The management committee consists of persons of good character with a fair knowledge of financial matters.


3 . How long is the appointment period.

The CRF executive and the management committee of the CDF/Provident Society?
Both committees are elected for one (1) year. They may however be reappointed by two-thirds of the membership of the organization.


4 . How are the CRF and CDF financed?

The CRF is financed by the members' shares and interest earnings.
The CDF is capitalized by The Social and Economic Support Programme (SESP) contributions, private sector grants and returns from investments.
MIDA provide loan funding based on membership savings and the net worth of the CDF.


5. How does one become a member of the CRF?

To become a member one has to attend a CRF meeting, complete a membership application form with recommendation from a member of the CRF executive.
The minimum deposit is $10.00 per week or multiples of the said sums, e.g. $20.00, $100.00, $1,000.00, $10,000.00, etc. Interest is paid on accumulated savings. There are no penalties if a member is not able to make his/her deposit for a particular week or for a long period.
A member can withdraw his/her total savings after one (1) day's notice providing the member has no loans.
In order to obtain loans, which are granted only through the CDF, member has to purchase shares in the CDF.

6. How do the members of the CRF become shareholders in the CDF or Provident Society?

Each Member of the savings group (the CRF) has the option to purchase shares in the Provident Society. The share price is $5.00 per share. Each member is limited to 80 shares which he/she may purchase in part or fully as their income will allow.


7. How is financial trust maintained?

The use of commercial banks or other financial institutions as the holder of the deposits will provide a sense of confidence and security to existing and potential savers. Also, one of the outside trustees must sign on CRF bank accounts along with either the Chairman, Secretary or Treasurer of the CRF.


8. Are members informed of the type of investments undertaken on their behalf ?

Yes. They are the shareholders and owners of the Provident Society and must be advised of investment options recommended by the management committee. If the members unanimously reject a particular investment option, then it will be abandoned.


9. What are the benefits?

The Provident Society the CDF will get support in the form of low interest loans and grants from government, international agencies and the private sector. These funds will be loaned to member/shareholders for individual projects and the rest will be invested in money and capital market instruments or assets on behalf of the group. The profits earned from loans and investments interest will be used to pay yearly dividends.


10. Can a member's loan request be rejected?
Yes. If in the opinion of the fellow members who sit on the organization's credit committee the loan is not viable they will not recommend approval.


11. Are the members counseled in operating their prospective businesses?

Yes. Every member must attend a minimum amount of business counseling sessions as determined by the support officer organizing the training course. No member can obtain a loan without attending the necessary training courses.

12. How much can one borrow from the CDF?

Generally, four (4) times the member's savings and shares combined. If the member have saved $3,000 he/she could borrow up to $12,000. The Credit Committee should recommend the final loan amount.


13. To whom does a member apply for a loan?

Directly to the CDF or the Secretary or Treasurer of the CRF, who will then take the application to the CDF, where the request is evaluated. If it is recommended it will then be taken to the credit committee or for approval.


14. Does MIDA support these groups?

Yes. The MIDA Parish Manager provides technical and management advice to community group in establishing the CRF and CDF. When the group is fully registered as a Provident Society, MIDA will consider requests from the organization to be an ALA under the MIDA program. If this request is granted, MIDA will provide loan funds to the Provident Society based on loan requests from their membership, the total amount saved, grants obtained, other assets and liabilities.


15. Who monitors the projects?

The loans officer appointed by the CDF/ Provident Society. MIDA's Parish Manager will also provide continued technical support during the implementation stage.


1 6. Are these organizations political?

No. They are NON-Government Organizations (NGOs) established by the community members with technical support from MIDA or any other agency with the necessary expertise. As a Provident society, they are charged to operate as a financial organization facilitating the economic well-being of its members without regard to politics, race or religion.

17. Are there any working models?

Yes, there are several such initiatives inland wide.


18. What is the primary purpose for developing these organizations?

The CRF/CDF model ensures the meaningful empowerment of the poor by not only providing them with financial and technical assistance to operate profitable businesses, but also to facilitate their efforts in sustaining and increasing their asset base through group investment initiatives. At the same time, it encourages savings and reduces consumption which in turn will reduce inflation.