Empowering Groups Through Financial Access and Discipline
The Revolving Loan Fund (RLF) Program is at the heart of Forum Kenya’s community empowerment model. It is a group-based financial system designed to promote a savings culture, provide affordable credit, and strengthen economic self-reliance—particularly among rural and underserved communities.
How It Works
Participants form or join self-help groups (SHGs) with 7–15 members, all from the same locality. Each member contributes a minimum monthly saving, which is recorded in individual passbooks. These savings form the foundation for loan eligibility and group advancement.
After three consecutive months of consistent saving and active participation, members become eligible for advances (short-term loans) or loans (longer-term, higher-value credit). All funds are issued based on the group’s collective savings and repayment performance.
Loan Features
- Advances: Short-term, low-interest loans given up to twice the value of a member’s savings. Repaid within 1–5 months with a reducing balance interest of 10%.
- Loans: Medium- to long-term credit issued up to three times the value of a member’s savings, in multiples of Ksh 5,000.
- Interest & Fines: Structured interest rates encourage timely repayment and sustainability. Official fines are in place to maintain discipline and accountability.
Top-Up Policy
To encourage financial consistency, Forum Kenya enforces a top-up policy. Although members can save beyond the minimum Ksh 400, only Ksh 2,000 per month is considered for loan qualification, allowing fair growth across all members.
Group Management Tools
Each group uses standardized documentation, including:
- Performance forms
- Advance and loan contracts
- Attendance registers
- Secretary forms
- Official receipts
- Risk fund contributions
Guarantees and Security
Loans are backed by group guarantees. Fellow members co-sign as guarantors, ensuring peer accountability. In addition, loans may require a main guarantor and asset-based collateral for larger amounts.
Impact Areas
The RLF Program has helped members:
- Start and expand agribusiness ventures
- Launch retail kiosks and service businesses
- Pay school fees or invest in farm inputs
- Manage emergencies without exploitation from informal lenders
Why It Matters
Forum Kenya’s RLF Program does more than lend money—it builds trust, financial literacy, and long-term stability. It replaces dependency with dignity and transforms self-help groups into engines of community-led economic development.
