Investing in Kagawa

The Kagawa Fund accepts investments, donations, and grants from individuals and organizations who wish to support the campus cooperative movement and contribute to its development. In turn, it uses this pool of revolving capital to provide risk financing to eligible campus cooperative development projects.

The Fund is held and managed by the Cooperative Development Foundation in Washington, D C. Decisions about the use of the Fund are made by a Board of Trustees composed of co-op managers and representatives from the broader cooperative movement. Technical assistance for the Fund’s lending activities is provided by the Campus Cooperative Development Corporation.

Investing in the Fund:

Beginning in 1997, individuals and organizations interested in supporting the development of campus cooperatives are now be able to make investments in the Kagawa Fund. This provides the Fund with a larger pool of capital to meet the needs of cooperative development projects.

Size of Investments & Term:

The Fund encourages investors to make a minimum investment of $5,000 for 5 years, although shorter term investments can be considered. These thresholds are designed to provide the Kagawa Fund with loan capital that best meets the needs of cooperative development projects.

Interest & Repayment:

Investments in the Kagawa Fund yield interest rates competitive with other low-risk investment vehicles. Interest is accrued throughout the term of the investment according to the performance of the Fund, and repaid with principle upon maturity. Payment of accrued interest on an annual basis is also possible. Returns on investments are capped at the rate of 5-year t-bills, which fluctuates between 3-5%.


The security of investments in the Kagawa Fund is ensured through the pooling of risk - a number of investors share the risks of lending to a number of different projects. The Fund has rigorous technical assistance for potential loans and monitoring for borrowers. In addition, the Fund has strict rules on collateral for projects, and a reserve of permanent equity capital which has been set aside to cover loan losses. After 10 years of operation, the Fund has had one default out of 14 loans, or a 7% rate, due to the default of a restaurant co-op.

Investors in the Fund have an unsecured claim on its assets (the Fund currently has over $120,000 in equity). The Fund also allocates 10% of its equity into a Loss Reserve, which functions to protect investors from loans which defaulting or poorly-performing loans.