The cornerstone of the ECLOF program are National ECLOF Committees (NECs). They take responsibility for managing the revolving fund nationally, for developing appropriate national strategies and for determining national priorities in accordance with policies and guidelines as defined by the ECLOF board of directors. Based on portfolio performance over time and adherence to ECLOF lending principles and policies, NECs can acquire increasingly higher levels of lending authority up to a maximum of US$ 40,000 per loan, without ratification by ECLOF staff or loan subcommittee of the ECLOF board.
ECLOF has two major financial instruments for its lending activities, the General Capital Fund and the Development Capital Fund.
General Capital
General Capital is used to fund churches, church buildings and community infrastructure such as schools, health clinics ECT. It reflects the original mandate of ECLOF and remains a very important aspect of ECLOFs work, particularly for churches with limited resources. The harsh economic situation in the majority of countries where ECLOF operates gives the fund even greater significance. Because of pressure on those governments to make budgetary adjustments, cut backs on spending for social services and education are often made.
This fund is a demonstration of ECLOFs belief in a holistic approach to development (as opposed to strictly economic development). Development in this sense stimulates groups to believe in themselves, their ability to work cohesively in a community and to improve the quality of their lives collectively. Once a loan is repaid, the sense of cohesiveness and pride in community or culture which comes with achievement remain, so that the group can later act on its own.
With the increased attention in recent years to loans to micrentrepreneurs contributions to this fund have fallen. However, its work is just as important as ever before. Social programs face the same difficulties obtaining credit as individuals, even more so because most other microcredit programs do not consider lending to them.
Development Capital
The Development Capital Fund was established in 1971 in response to recognition by the 1968 World Council of Churches Uppsala Assembly of the dire poverty affecting millions of people in the "Third World". The fund was established to provide loans specifically aimed at "combating the root causes of under-development and at promoting social justice and self-reliance".
Loans from Development capital are used to promote the advancement of community either directly through financing for services such as water sanitation, health facilities, vocational schools or indirectly through loans to groups involved in income generating activities such as agriculture, fishing, small-scale industries and trade. These programmes have had a significant impact on socio-economically marginalized rural and urban communities and have become a major aspect of the ECLOF work. Development Capital loans are currently over 70% of all ECLOF lending.
Eastern Europe Fund
ECLOF began its lending activities after World War II to finance the reconstruction of churches in Western and Central Europe. Eastern Europe was denied this possibility and thus the means to parallel the reconstruction and development of churches in the rest of Europe.
With the fall of the Berlin wall and communist regimes in the 1980s, the latent needs of churches in the East for capital resources to finance their reconstruction resurfaced. In response, and working through the Europe Desk of Unit IV, Sharing and Service, of the World Council of Churches, ECLOF set about exploring the possibilities of setting up one or more national committees in Eastern Europe.
In 1994, the Executive Committee of ECLOF took the decision to establish a special fund for Eastern Europe and inquiries from interested organizations to initiate committees were officially entertained. Progress was slow but at the end of 1996 a new NEC was born in the Slovak Republic and in 1998 North West Russia and Armenia were born.
ECLOF would like to express its gratitude here to ECLOF Austria which, after 45 years of successful activity and growth, returned the capital it had accumulated in fulfillment of its ecumenical responsibility and conscious of the fact that, "...in other churches, such as in the Eastern Europe reformed churches, the need for help is more urgent."
[Source: http://www.eclof.org ]