RURAL FINANCE

Dominion, Volume 24, Issue 147, 18 March 1931, Page 7

RURAL FINANCE

Intermediate Credit CHAIN OF ASSOCIATIONS Reporting on action taken to further the formation of rural credit associations through the Dominion, Mr. J. W. Macdonald, Commissioner of Rural Intermediate Credit, informed members of th. board at the monthly meeting, held in Wellington, that the association method of obtaining finance was proving increasingly popular. The completion of a chain of associations throughout the Dominion was the object which the board had in view, and it was interesting to note that at .the present time there were 40. associations formed, of which 39 were in a position to make loans, while the other would be in a position to do so immediately its statutory meeting had been held. “A marked feature of the system at the present time is that the bulk of lending business is being done through associations,” Mr. Macdonald said. “Only a very small proportion of the loans now granted are made supported by guarantees. , ... “By granting preference to loans which have for their object the increasing of production as opposed to‘ the discharging of existing liabilities, the board has been able to render considerable assistance to farmers in increasing their returns to enable them to meet their commitments at present when prices for primary produce are low, and it is anticipated that as the productive season draws to a close increased demands will be made upon the board for finance to enable farmers to purchase stock and effect improvements' in order again that production may be increased. “The board’s experience with borrowers has proved exceptionally satisfactory, and the payments to the board have been well maintained, more especially as in the great majority of cases the annual repayments were fixed when farmers were receiving higher prices for their produce. It has been recognised, of course, that owing to the drop in prices it is necessary to meet borrowers wherever possible in regard to repayments required from them, and all applications for revision of the basis of repayment of loans have been dealt with as sympathetically as possible bearing in mind the fact that the interest of the board’s debenture-hold-ers must be fully protected.”