LONG-DATED LOANS

Northern Advocate, 18 June 1926, Page 4

LONG-DATED LOANS

| One of the most important features i of the annual report of the chairman of directors of the Bank of Now Zealand is the announcement that the bank has decided, subject to Parliamentary authority being granted, to set up a department for the purpose of making long-dated loans on an amortisation basis. In other words, 1 the bank proposes to make loans on the system which allows principal and interest to be paid o(T by half-yearly instalments extending over a great number of years. This is mainly done in the. Dominion at tne present time by the Government Advances to Settlers Department, and, as is shown by the huge dimensions to which this department’s business has grown, it is an extremely popular form of borrowing. This is proved by the fact that on March 31 last the department’s existing loans amounted to thirty millions sterling made to 60,000 borrowers. It. is contended that banks have in existence the machinery that would enable them to conduct a lending business of this description more cheaply than any other organisation in the Dominion. If this bo so, the Bank of Now Zealand’s competition with the State Advances Department must bo. to the advantage of borrowers, and should materially hasten the settlement and development of the Dominion.