Revolving Funds as a Tool for the Success of Rural Development Projects. Case Study: “Casa Campesina” Cayambe (Ecuador)

Abstract

A key element of sustainable rural development is to improve the welfare of communities so they can enjoy a decent and fair life, which cannot be achieved without an increase in their incomes. To achieve this, it is necessary that rural development projects seek to strengthen productive capacities and management of communities as well as successfully incorporate funding mechanisms to enable the sustainability of accomplished development. One of these is called a ``Revolving Fund{''} for microcredits, which is an example of a funding mechanism that has been applied in rural settings to support entrepreneurs in order to generate productivity. To prove that these mechanisms are valid to ensure the sustainability of the improvement in the welfare of communities, this paper details the experience of Revolving Funds which were implemented in 1994 in the ``Casa Campesina{''} development project in Cayambe (Ecuador) with $16.708, and that remain active in 2013, and have lent more than $4.000.000 of credits. A two-step research model was used which analyses the experience from both a quantitative (amount and number of credits) and qualitative (impact on beneficiaries) approach.